Ringgit is undervalued, says BNM governor

Bank Negara Malaysia (BNM) governor Abdul Rasheed Ghaffour said the ringgit is undervalued and “ought to be traded higher”.

In a three-paragraph statement, he said: “Given Malaysia’s positive economic fundamentals and prospects, the ringgit ought to be traded higher.”

He added that BNM has stepped up engagements with government-linked investment companies, government-linked companies, corporations and investors to encourage continuous inflows to the foreign exchange market.

Previously, Prime Minister Anwar Ibrahim said the government is not ignoring or taking the decline of the ringgit lightly, and it is making continuous efforts to address the issue while simultaneously assuring Malaysia’s investment figures remain intact.

The central bank, he said, has been assigned to monitor the ringgit closely, and on the government’s side, relevant ministries and authorities, including the investment council, are conducting daily meetings to tackle the issue.

“It is concerning. But look at the overall investments, which are the biggest ever for the country. Inflation continues to go down, unemployment is down, and growth (is) sustained compared to our neighbours,” he added.

PM Anwar Ibrahim

Anwar, who is also the finance minister, urged all quarters not to turn the weakening ringgit into a “political punching bag”.

As the ringgit slide brings it close to its performance during the 1998 Asian financial crisis, the prime minister said the current situation cannot be compared to what transpired more than two decades ago when he was also the finance minister.

Pointing out that the factors for the ringgit’s decline were different, he said this is because investors are still pumping money into Malaysia while inflation and unemployment are declining.

He also reiterated that the government is not relying on the dollar for trade, with business with China, for example, using the renminbi or ringgit.

Meanwhile, Bernama reported that the ringgit was traded at 4.7770/7805 at 12.32pm today after opening at 4.7775/7805 against the greenback compared with Monday’s close of 4.7750/7795. - Mkini