Interest rates stable despite depreciation of ringgit, says Liew

  • Nation
  • Friday, 09 Jun 2023

GEORGE TOWN: The ringgit may have depreciated against the US dollar but interest rates have not increased rapidly, says Deputy International Trade and Industry Minister Liew Chin Tong.

"Bank Negara decided to increase the rate at a very slow pace and not follow the US dollar or Singapore dollar because Malaysian household debt is at nearly a 90% ratio to our gross domestic product (GDP).

"Because of this, we cannot increase the interest rate too much whereas the United States has increased 10 times out of the 14 months," he said.

He added that although the ringgit vis-a-vis was weaker against the US, Singapore or Hong Kong dollars, it did not depreciate much compared to other currencies.

Liew said the Singapore and Hong Kong dollar have an almost virtual peg to the US dollar so when the United States increases interest rates, it will be followed by these countries.

He added that the ringgit's fluctuation is similar to currencies like the Japanese yen or Chinese renminbi, which are not pegged to the US dollar.

Liew was at the Northern Edition of its Automation and Digital Forum Series titled "Driving Business Thru Digitalisation and Automation – The Journey Together" at Eastin Hotel here on Friday (June 9).

He gave the keynote address at the event to participants comprising Small and Medium Enterprises (SMEs) and manufacturing companies in the state.

The event, endorsed by the International Trade and Industry Ministry was co organised by Bizsphere, the administrator of Smart4Wrd, a collaborative platform on Industry 4.0 Ecosystem.

During a dialogue session, Liew also said China would remain Malaysia's largest trading partner for years to come and was a major source of investment.

"We in Malaysia are trying to balance the geopolitics so that we can prosper between the United States and China. We will have to manage it geopolitically and economically," he said.

The event was organised as a platform to promote the available financial assistance provided by Malaysian Industrial Development Finance (MIDF) for local businesses.

During the event, a memorandum of collaboration was signed between MIDF and the Northern Corridor Implementation Authority (NCIA) to facilitate the process of linking local companies in the Northern Corridor Economic Region with MIDF, enabling them to access a wide range of financial advisory solutions.

Meanwhile, MIDF head of development finance division Azizi Mustafa said MIDF is a strong supporter of automation and modernisation and would do whatever it can to accelerate and facilitate SMEs to adopt automation and modernisation by collaborating with partners like NCIA.

"We want to widen our reach so that more and more companies will have access and advisory especially on SME to embark on automation and modernisation through Industry 4.0 adoption," he added.

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