KUALA LUMPUR (Aug 12): Bank Negara Malaysia (BNM) governor Datuk Muhammad Ibrahim said the current volatility affecting the Malaysian ringgit, as well as regional currencies, will persist in the near-term, with the volatility seen as the new norm for the ringgit.

Muhammad said regional currencies are currently reflecting the strength of the greenback, which has performed strongly over the past few months.

“If you look at the numbers we have shared, Malaysia’s economic data is quite strong. Over the long run, it (the ringgit) will reflect the strength in our economy.

“In the short term, however, the ringgit, as well as regional currencies, would continue to be influenced by external noises because of worries on growth, geopolitical events and the policy changes undertaken by some of the developed economies,” he said.

“So, volatility is the new norm,” he said during a press conference, following the release of Malaysia’s gross domestic production (GDP) data for the second quarter of 2016.

BNM said the ringgit has retraced some of its gains, depreciating by 2.5% in the second quarter, following the strong 9.4% appreciation seen in the preceding quarter.

At the time of writing, the ringgit has weakened 0.27% to trade at 4.0153 against the U.S. dollar, after breaching the 4.00 mark earlier in the day to trade at a low of 3.9913.

Meanwhile, asked on whether the central bank would reopen its investigations into troubled state investment fund 1Malaysia Development Bhd (1MDB), Muhammad said the central bank has concluded its investigations, as far as BNM’s scope of power is concerned.

“For these kinds of cases, we will look at the nature of the transaction and we will decide which particular law might be breached. There are many laws, for example the Financial Services Act, which falls under BNM.

“There are many laws set by the different authorities. A breach of the Financial Services Act (FSA) would fall under BNM’s scope. If there’s an element of corruption, it would be under the Malaysian Anti Corruption Commission (MACC) purview. If there is cheating involved, that would be investigated by the police,” he said.

He said if any of the offenses fall under the scope of the other authorities, the central bank would pass the necessary information to the respective authority, with the authority to take further action.

“Cheating, corruption and abuse of power do not fall under the central bank’s scope, but we will put all the necessary information to the lead enforcement agency.

“In the case of 1MDB, there are certain rules and regulations that have been broken. And we have taken the action under the law entrusted to the central bank. We have taken all necessary actions entrusted to us under the law, and we have closed the investigation,” he added.