KUALA LUMPUR: The government will leave it to Bank Negara Malaysia (BNM) to decide whether exporting companies should be compelled to convert their export proceeds into ringgit, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz (pic).
He said the move, which was done by the central bank at the end of 2016, had its advantages and disadvantages as a form of capital control in controlling the difference in interest rates between the ringgit and foreign currencies.
“If we look at the interest rate differential (between the overnight policy rate at 3% and US Federal Reserve’s funds rate at 5.25% ) it is quite large, the US dollar rate is even higher than the ringgit rate.
“This is under BNM’s purview. I leave this (matter) to BNM’s discretion on how to control it,” he said in a press conference after officiating the prelaunch of the International Electric Mobility Showcase 2023 (IEMS 2023) here today.
In December 2016, BNM stipulated that local exporters must convert 75% of the revenue generated from exports into ringgit and only 25% is allowed to be retained in foreign currency.
Tengku Zafrul called for local companies, especially government-linked companies (GLCs), to play a role in supporting the growth of the ringgit and not just leave the responsibility solely to the government.
“This is important, we must show confidence in our currency, especially Malaysian companies and GLCs which are involved in exporting.
“As a trading nation, we are the net exporter. We have current account position, which should be positive for our currency, but we must (also) make sure (that) we remain passionate about supporting our country’s currency as well,” he said.
On potential Malaysia-Tesla collaboration, Zafrul said it is not only limited to the electric vehicle (EV) sector but other sectors as well.
He added there would be a call between Prime Minister Datuk Seri Anwar Ibrahim and Tesla founder and CEO Elon Musk sometime before the end of this week.
“There is more than just the EV sector that we are talking about in this potential collaboration.
“What we want is to attract more potential or investment commitment in the automotive sector and other sectors that we can market within Malaysia,” he said.
Tesla, an EV designer and manufacturer headquartered in Austin, Texas, US, will be making its official debut in Malaysia with the official unveiling taking place here on July 20.
Meanwhile, Malaysian Green Technology and Climate Change Corporation (MGTC) group CEO Shamsul Bahar Mohd Nor said he hoped Tesla would take part in IEMS 2023 scheduled on Oct 4-6.
He said IEMS 2023 is aiming to secure RM4 billion in green technology and sustainability-led investment prospects compared with RM3 billion garnered during last year’s installation.
About 400 exhibitors, including those from China, Japan, Taiwan, Sweden, Austria and the Netherlands, are expected to take part in IEMS 2023, drawing an expected 40,000 visitors. – Bernama