External factors continue to affect the performance of ringgit and other regional currencies, said Deputy Finance Minister Datuk Seri Ahmad Maslan.
Ahmad Maslan said among other factors that contributed to the drop in value of ringgit this year is due to the United States federal funds rate (FFR) that is expected to remain higher, longer.
“(Despite) the effort by US Federal Reserve (Fed) to maintain US inflation rate at 3.7 per cent, with the increase of FFR to 5.5 per cent. Overnight policy rate (OPR) remains at per cent.
“It is up to Bank Negara Malaysia (BNM) to implement measures related to OPR, but our inflation rate has gone down from 2.0 per cent to 1.9 per cent…therefore raising OPR is longer relevant,” he told Dewan Rakyat today (Oct 23).
He said this while he answered supplementary question from Datuk Bakhtiar Wan Chik (Balik Pulau-PH) on whether the government and BNM has other plans to stop the weakening of ringgit further besides increasing OPR rate.
Ahmad Maslan added other factors that affect the fall of ringgit is China’s weaker economic performance and the relaxing of monetary policy from its central bank, People’s Bank of China, which is affecting investor’s sentiment in Southeast Asian region.
“The latest concern is the rise of geopolitical tension in the Middle East that has further strengthened US dollar,” he said.
