KUALA LUMPUR – Although the ringgit fluctuation is concerning, Malaysia has notched a new record with a total approved investment of RM329.5 billion in the last year, said Prime Minister Datuk Seri Anwar Ibrahim.
“We have to take a comprehensive view of the country’s capacity to grow and to sustain growth. Inflation is down, unemployment is down. We are not ignoring the (ringgit) problem, we are monitoring it as it affects us all.
“The current situation and what took place in 1998 are not the same. At that time, investments were down and inflation was high,” he said after launching the TRX financial hub at Menara Exchange 106 here today.
“With the record approved investments announced yesterday, this showed that Malaysia did not lose investor confidence due to the ringgit’s performance. It remains easy for me to meet with investors, especially exporters.”
Anwar added that a National Investment Council meeting was held yesterday as well as a National Action Council on Cost of Living meeting this afternoon, assuring that the government is focused on addressing cost of living issues.
The ringgit has been fluctuating against the US dollar, and fell to 4.7965 on Wednesday, its weakest level since an all-time low of 4.8850 in 1998 following the fallout from the Asian Financial Crisis.
On the same day, Bank Negara governor Datuk Shaik Abdul Rasheed Ghaffour said the ringgit’s current level does not reflect the positive prospects of the Malaysian economy going forward, as growth in 2024 would be driven by an improvement in external demand and strong domestic spending.
This morning, the local currency slipped to 4.7745 against the greenback and traded mixed against other Asean currencies. It advanced against the Thai baht to 13.2780/2999 compared with 13.3105/3404 at yesterday’s close and improved against the Singapore dollar to 3.5554/5600 from 3.5578/5648.
However, the local note slipped against the Indonesian rupiah to 306.2/306.7 from 305.9/306.7 yesterday and was easier against the Philippines’ peso at 8.57/8.58 from 8.56/8.58.
Yesterday, Anwar announced that Malaysia achieved a new record with a total approved investment of RM329.5 billion in 2023, marking a 23% increase from the previous year.
This is the highest approved investment in the country’s history. Foreign investments, accounting for 57.2%, were the primary driving force, surpassing domestic investments, which constituted 42.8% of the total.
Anwar, who is also finance minister, said the total approved investment encompassed 5,101 projects, potentially creating over 127,000 new job opportunities for both the people and the country.
“The digital economy in Malaysia, contributing 23.2% to the GDP in 2021, is projected to rise to 25.5% by 2025.
For the record, the regional financial crisis that started in 1997 saw speculative short-selling of the ringgit and a sharp dive in foreign direct investments.
At the time, Bank Negara Malaysia imposed capital controls and pegged the ringgit at RM3.80 to the US dollar, as well as a 7.5% GDP contraction in 1998. – February 23, 2024