Market risk is monitored on a daily basis and all of the investments and instruments will have a marked to market value. We can see how sensitive the financials are against forex movements of the ringgit versus the biggest-use currency in the world. There seems little to worry about the possibility of large forex losses for the central bank currently. Nonetheless, as we had pointed out in our recent paper, “How Low Can the Malaysian Ringgit Go?”, there is a need to tame the volatility of the ringgit, and there are two ways to do that — either through direct intervention or through deepening the ringgit market. The first option, of course, means that forex losses could be visibly large at the central bank.

Source: The Edge Markets September 21, 2022 22:58 UTC