Strong economic fundamentals, prudent management to contribute to stronger ringgit, says finance minister

A Malaysia Ringgit note is seen in this illustration photo June 1, 2017. — Reuters pic

A Malaysia Ringgit note is seen in this illustration photo June 1, 2017. — Reuters pic

Saturday, 28 May 2022 8:41 PM MYT

KUALA LUMPUR, May 28 — Strong economic fundamentals and prudent ringgit management are expected to contribute to the strengthening of the ringgit against the US dollar despite several temporary factors that have contributed to the ringgit’s current depreciation, Minister of Finance Tengku Datuk Seri Zafrul Tengku Abdul Aziz said.

He said that based on current factors, the ringgit’s value is expected to remain stable as Bank Negara Malaysia (BNM) actively manages the local unit to ensure that fluctuations are orderly and not excessive, allowing the economic sector to make investment and expenditure plans based on a more stable value of the ringgit.

“What is more important are our economy’s strong fundamentals such as the country’s continued economic growth prospects,” he said in a statement today.

He said the ringgit would continue to strengthen as the economy expanded by 3.6 per cent in the fourth quarter of 2021 and five per cent in the first quarter (Q1) of 2022.

“This is also reflected in the most recent International Monetary Fund (IMF) analysis, which projects 5.75 per cent gross domestic product (GDP) growth for Malaysia in 2022 driven by pent-up domestic demand and continued strong external demand.

“At the same time, the expectation of a current account surplus means that demand for the ringgit will remain strong,” he said.

Moving forward, Tengku Zafrul said the Ministry of Finance (MoF) is optimistic about the country’s economic growth prospects with Malaysia’s GDP expected to grow between 5.3 and 6.3 per cent in 2022, contributing to the ringgit’s stability.

“The MoF and Bank Negara Malaysia (BNM) will continue to monitor both financial and non-financial risks to the national economy in order to maintain economic stability and the well-being of all Malaysians,” he added. — Bernama


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