KUALA LUMPUR, Nov 15 --  Bank Negara Malaysia (BNM) will continue to engage with index providers and investors to see what other measures it can put in place to create greater efficiency in the market.

Governor Datuk Nor Shamsiah Mohd Yunus said the central bank had been working on addressing any concerns of FTSE Russell such as giving greater flexibility to offshore investors to hedge positions onshore and that foreign exchange transaction volumes were growing while the cost of transactions was going down.

“This is a positive development and FTSE Russell acknowledged that,� she told a media briefing after announcing Malaysia’s third-quarter (Q3) gross domestic product (GDP) ​​​performance here today.

In September, FTSE Russell had decided to retain Malaysian bonds on its FTSE World Government Bond Index watch list with the next review due in March next year.

Meanwhile, Nor Shamsiah said the performance of the domestic financial markets during the quarter was mixed, largely reflecting shifts in investor sentiments and risk appetites amid a confluence of external factors such as worsening trade tensions and concerns on the global growth outlook.

This, in turn, provided strong support for safe-haven assets like the US dollar, whereby during the quarter under review, the ringgit depreciated by 1.1 per cent against the greenback in line with regional currencies. 

However, since October, the ringgit has appreciated 0.7 per cent to the US dollar (up to Nov 14) following inflows to the domestic bond market due to policy interest rate cuts by global and regional central banks, while for the year-to-date (up to Nov 14), the ringgit has depreciated by 0.5 per cent against the greenback.

On the overnight policy rate, which was maintained at three per cent at the July, September, and November 2019 Monetary Policy Committee meetings, Nor Shamsiah said it would continue to assess the balance of risks to domestic growth and inflation to ensure that the monetary policy stance remains conducive to sustainable growth amid price stability. 

“At this level, the stance of monetary policy remains accommodative and supportive of economic activity,� she added.

In Q3 2019, the Malaysian economy grew 4.4 per cent, moderately lower compared with the 4.9 per cent growth recorded in Q2 2019.

Headline inflation stood at 1.3 per cent for the quarter under review while the current account surplus of the balance of payments amounted to RM11.5 billion or 3.1 per cent of the gross national income.

-- BERNAMA