Ringgit Peg: Malaysia Adopts a Managed Float from today onwards

Malaysia has abandoned it's seven year peg to the United States Dollar (USD) in what has been seen by many as a move that follows China. Both nation has moved to a managed float. This will allow the ringgit to trade in a band against an undisclosed basket of trade-weighted currencies.

However, it is widely believed that the ringgit will not deviate much from its current level of RM3.80 to a dollar.

According to Reuters, earlier on today, Bank Negara Malaysia has declined to comment on the market talk that it had intervened in the currency markets to stabilise the ringgit.

"We are not going to comment on daily operations," Abu Hassan Alshari Yahaya, Director of the bank's Corporate Communication Department, told Reuters.

Currency traders said it appeared the central bank had stepped into the market to buy dollars to prevent a rapid appreciation in the ringgit, which is widely viewed by economists to be undervalued. At 1125 Malaysian time, the currency stood at 3.78 to the greenback, compared with its old peg of 3.80.