Financial markets stay resilient amid global volatility, BNM says

FINANCIAL markets remain robust and continue to function efficiently in the face of heightened global volatility, according to Bank Negara Malaysia’s (BNM) Financial Markets Committee (FMC).

In a statement following its April 28 meeting, the committee noted that the ringgit has strengthened by 2.3 per cent year-to-date (YTD) against the US dollar, largely driven by a broad weakening of the greenback and supported by healthy domestic foreign exchange market liquidity.

Bernama cited the FMC saying, “The domestic foreign exchange market remains highly liquid, with an average daily turnover of US\$18.8 billion YTD and a year-on-year growth of 6.8 per cent, enabling Malaysian corporates to meet their FX needs effectively.”

The domestic equity market also showed resilience. While the FBM KLCI initially dropped 8.2 per cent after the US tariff announcement on April 2—mirroring declines in global equities—it rebounded after the pause in tariff implementation, ending just 1.1 per cent lower by April 25.

Bond market activity also showed strong demand, with the average bid-to-cover ratio for government bond auctions rising to 3.01 YTD from 2.56 in 2024. Liquidity in the secondary bond market improved significantly, with average daily trading volume reaching RM7.3 billion in 2025, up from RM4.6 billion last year and peaking at RM15.5 billion.

The FMC also welcomed the continued growth of the Islamic financial market, particularly the Malaysian Government Investment Issue (MGII), which now stands nearly equal to conventional Malaysian Government Securities (MGS) in size and trading volume.

“MGII now accounts for 48 per cent of government bonds outstanding and 47 per cent of trading volume YTD. This reflects growing global recognition and acceptance of sukuk as a credible asset class,” the FMC said.

It added that BNM’s efforts to enhance the accessibility, liquidity, and visibility of MGII will be critical to maintaining this momentum.

FMC chairman and BNM deputy governor Adnan Zaylani concluded, “The Malaysian financial markets have remained orderly despite the volatile external environment. This allows us to focus our efforts on market development initiatives that will further enhance investors’ experience. Nonetheless, we remain vigilant amid the rapidly evolving global situation.” - May 6, 2025