Coordinated govt actions bolster ringgit as Asia's top performing currency - MoF

KUALA LUMPUR: The ringgit has emerged as the top-performing currency in the Asian region compared to the US dollar as a result of the implementation of coordinated actions by the government and Bank Negara Malaysia (BNM) since Feb 26, 2024, said the Ministry of Finance (MOF).

In a written answer in the Senate, the ministry said that the actions were undertaken to encourage a more consistent inflow of funds into the domestic financial market, including the repatriation and conversion of foreign investment income by government-related companies.

"As of July 17, 2024, the ringgit is traded at 4.6642, as against 4.7987, the lowest exchange rate ever recorded this year.

"In addition, the ringgit’s normal effective exchange rate (NEER), which is a measure of the ringgit's performance against its major trading partners, has also increased by 3.4 per cent," the ministry said in response to Senator Datuk Shamsuddin Abd Ghaffar’s question about the government's efforts towards improving the value of the ringgit against the US dollar and when the efforts will be successful.

MOF said the central bank will continue to take appropriate measures to ensure the stability of the local note and the domestic foreign exchange market.

"This includes taking operational measures to intervene in the foreign exchange market to curb currency movements that are considered excessive,” it said.

The ministry also insisted that the government remain committed and focused on implementing structural reform and fiscal strengthening policies.

It added that various measures have been carried out and are starting to show positive results, namely the approved investments, which stay encouraging for 2023 at RM330 billion versus 267.8 billion in 2022 and amount to RM89.7 billion in the first quarter of this year (1Q 2024) as compared to RM71.4 billion in 1Q 2023.

Meanwhile, after 6 years, JP Morgan has upgraded Malaysia from "underweight” to "neutral” following the structural reform policy implemented, as well as investments in the development of regional data hub centres and green technology.

"This shows that investors remain confident in the development of the country's economy and the efforts made by the government.

"This inflow of funds and foreign investments is expected to continue and will be able to support the strengthening of the ringgit's value,” said MOF. - Bernama