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Sunday, August 9, 2015

Markets will favour ringgit despite plunge, says minister

 Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar says investors still have confidence in the Malaysian economy despite the ringgit's plunge in recent months. – The Malaysian Insider file pic, August 9, 2015. Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar says investors still have confidence in the Malaysian economy despite the ringgit's plunge in recent months. – The Malaysian Insider file pic, August 9, 2015.
Market sentiments on the ringgit, which has hit a 17-year low against the US dollar, will improve as long as Putrajaya continues to focus on strengthening the country's economic fundamentals, said Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar.
Wahid said Malaysia was financially better off than it was during the 1998 economic crisis, adding that the ringgit’s slide was due to external factors.
He said private investors were still confident in the economy, as shown by the increase in private sector contribution to the economy, from 64% in the first quarter of last year to 64% of the same span this year.
The global drop in oil prices has also hurt oil exporting countries such as Malaysia, Wahid told reporters after the 2015 Malaysian Student Leaders’ Summit (MSLS) in Kuala Lumpur today.
“When it comes to sentiments, we should concentrate on our fundamentals. We are better off than 1998 and I believe if we deal these issues, then sentiments will come back.
“We are better off in terms of our reserves, our trade balance is better where there is RM41 billion in the first 6 months, unemployment is stable at 3%, banks are well capitalised,” he said.
Wahid said this in response to arguments that the ringgit’s slide reflects investors' loss of confidence in Putrajaya’s management of the economy.
Yesterday, Bukit Bendera MP Zairil Khir Johari said the ringgit’s fall was proof that foreigners were losing confidence in the Malaysian economy.
"This shows low investor confidence and that the rest of the world also thinks the Malaysian economy is heading in the wrong direction," Zairil said when speaking at yesterday’s 2015 MSLS panel.
The ringgit has been Asia's worst performing currency this year, dropping to 17-year record low in the past month.
On Thursday, it breached RM3.90 against the US dollar for the first time since the Asian financial crisis in 1998. Oil prices also fell below US$50 ((RM196) a barrel.
- TMI

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