Rafizi: Ringgit depreciation due to uncertain global economy

 

The ringgit’s depreciation against the US dollar is due to the uncertainty of the global economy this year, said Economy Minister Rafizi Ramli.

This, Rafizi said, resulted in heightened demand for more secure investments.

“Due to the uncertainty from the global economy, mainly the United States, the international market prefers to go for more secure investments which are gold and US dollars,” he told reporters in response to a question. 

He cited the bankruptcy of Silicon Valley Bank in March, the conflict in the US Congress over raising the debt ceiling, and new federal spending cuts.

However, Rafizi said that the ringgit’s performance is now more secure.

“If we look at the ringgit’s performance from December to early February, it has strengthened to RM4.20 against the US dollar due to political and economic stability,” he said. 

He also noted that the previous government did not increase the overnight policy rate (OPR) even though neighbouring countries had already raised the rates right after the Covid-19 pandemic.

“We are pretty much behind compared with our neighbouring countries where as soon as the pandemic ended, they immediately normalised their interest rate, not far from the United States.

“However, we are late, maybe because we were too busy with the general election,” he said. - Mkini