Bank Negara: Ringgit's current level doesn't reflect Malaysian economy’s positive outlook

KUALA LUMPUR: The recent performance of the ringgit, like other regional currencies, are impacted by external factors such as market adjustments to shifting US interest rate expectations, geopolitical concerns, and uncertainties surrounding China's economic outlook, according to Bank Negara.

“Bank Negara is of the view that the current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward,” Bank Negara governor Datuk Abdul Rasheed Ghaffour said in a statement.

He noted that the growth in 2024 will be driven by the improvement in external demand and strong domestic spending.

“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. Investment momentum has picked up with the implementation of approved projects both in the private and public sectors,” he said.

“Reflecting these positive developments and the Government’s commitment to implement structural reforms and the expected lowering of interest rates in advanced economies, most analysts are forecasting for the ringgit to appreciate this year,” Abdul Rasheed said.