KUALA LUMPUR: The onshore and offshore ringgit non-deliverable forward (NDF) markets are seen to be returning to normalcy ahead of an important statement to be made by Bank Negara Malaysia (BNM) later on Friday. The improvement was reflected in the narrowing of the spread between the onshore and offshore NDF rates.At 3.17pm, the ringgit was trading at 4.4537 to the US dollar, advancing from Thursday's close of 4.4635.The one-month offshore NDF was at 4.4552 from the previous close of 4.4735.Sources said offshore banks were selling off their NDF hedge as they slowly exit from their ringgit positions following the recent weeks of speculative position taking.On Nov 30, the Minister of Finance II Datuk Johari Abdul Ghani disputed the assertion that the ringgit’s decline was due to excessive capital outflows from the country.StarBiz reported that Johari pointed out that Bank Negara’s latest international reserve figures saw an increase to US$98.3bil as at Nov 15 compared to the US$97.8bil recorded as at Oct 31.“Whilst the ringgit has indeed depreciated in recent periods due partly to the speculative activities in the offshore market, it has not led to a material decline in Malaysia’s foreign-exchange reserves. To the contrary, Malaysia’s foreign reserves have been fairly stable throughout 2016 at around US$97bil,” he said.

Source: The Star December 02, 2016 07:44 UTC