After a call by the Prime Minister Datuk Seri Anwar Ibrahim for Bank Negara to comment on the ringgit’s dire state, governor Datuk Abdul Rasheed Ghaffour has issued a statement explaining on the local currency’s position in the region.
The statement sent out on Tuesday, Datuk Ghaffour said the recent performance of the ringgit, similar to other regional currencies, has been influenced by external factors where some of these factors include market adjustment to changing US interest rate expectations, geopolitical concerns and uncertainty surrounding China’s economic prospects.
He said, BNM is of the view that the current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward. Adding that growth in 2024 will be driven by the improvement in external demand and strong domestic spending. The latest IMF forecast is for global trade to improve from 0.4% in 2023 to 3.3% in 2024. For Malaysia, exports have shown steady improvements since the fourth quarter of 2023. In fact, the recently-released January 2024 exports have turned positive (+8.7%). The tourism sector has recovered strongly with tourist arrivals in 2024 expected to exceed the pre-pandemic levels of 26 million.
The Central Bank Governor further added that investment momentum has picked up with the implementation of approved projects both in the private and public sectors. Reflecting these positive developments and the Government’s commitment to implement structural reforms and the expected lowering of interest rates in advanced economies, he said most analysts are forecasting for the ringgit to appreciate this year.
The ringgit has slid to a 26 year low as of today against the dollar with international reports linking the weak performance to the country’s disappointing growth.
