As a highly open economy, the exchange rate is a very important relative price affecting many aspects of the economy. With growth
gaining momentum, steady disinflation, a current account surplus and a strong banking system, current ringgit movements appear to
be more heavily influenced by global events and certainly do not reflect our economic fundamentals, BNM Governor Datuk Abdul Rasheed Rasheed said this today at the opening of the JC3 Journey to Zero Conference 2023.
“I want to emphasise strongly that Malaysia’s economy today is resilient notably in terms of our economic fundamentals, robustness of our financial sector, and depth of our financial markets. Let me also stress that the Bank remains committed to deploy necessary measures to ensure that the ringgit adjusts in an orderly manner and businesses continue to be facilitated. We have been in the markets, and we will, when needed, continue to be in the market,” he added.
Abdul Rasheed statement comes at a time when the Department of Statistics Malaysia,in its recent report ,indicated GDP for Q3 to be 3.3% however, research house Kenanga has forecasted a 1.7% growth amid a global downturn in manufacturing demands.
Malaysia has resisted pegging the local currency as it did back in 1997 during the Asian Financial Crisis when the ringgit was close to what it is today.
The ringgit opened lower against the US dollar due to higher demand for the greenback amidst the ongoing conflict in the Middle East.
At 9am, the local currency fell to 4.7750/7785 against the greenback from last Friday’s close of 4.7655/7700.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said he expects the US Federal Reserve to remain hawkish in light of the current situation, boosting demand for the greenback.
The ringgit has been labelled as the worst performing currency in the region this year.
