Bank Negara Malaysia said today the "disruptive influence" from the non-deliverable forward (NDF) market on the ringgit has subsided, making a success of its efforts to stifle the offshore market.
Last month the central bank began trying to force currency traders overseas to stop driving the ringgit lower and demanded that banks sign a commitment to cease trading the ringgit on the offshore NDF market. It also said it would implement several measures to boost onshore ringgit trade.
Liquidity on the onshore foreign exchange market registered a daily average volume of around US$9 billion this month, compared with a monthly average of US$8 billion in the previous 11 months, Bank Negara Malaysia said in a statement today.
"FX flows comprise supply and demand from all major participants, including the exporters/importers, portfolio related and direct investments," the central bank said.