U.S. Department of the Treasury and Bank Negara Malaysia agree continued FX consultations and new disclosure commitments

The U.S. Department of the Treasury and Bank Negara Malaysia issued a joint statement agreeing to continue close consultations on macroeconomic and foreign exchange matters and reaffirming their commitments under the International Monetary Fund Articles of Agreement to avoid manipulating exchange rates or the international monetary system. The statement sets out that any macroprudential or capital flow measures will not target exchange rates for competitive purposes, and that other government investment vehicles such as pension funds invest abroad for risk-adjusted return and diversification rather than to influence the exchange rate. It also frames foreign exchange intervention, when considered, as a tool to combat excess volatility and disorderly movements, and expects it to be considered equally appropriate for addressing excessively volatile or disorderly depreciation or appreciation. On transparency, Bank Negara Malaysia committed to publish aggregated net foreign exchange purchases or sales over a 12-month period at end-March and end-September each year on a six-month rolling basis, and to publish foreign exchange reserves data and forward positions monthly in line with the IMF’s Data Template on International Reserves and Foreign Currency Liquidity; it also committed to provide the U.S. Treasury bilateral disclosure of aggregated net foreign exchange purchases or sales over a six-month period with a three-month lag, subject to confidentiality constraints.