KUALA LUMPUR – Malaysia’s strong economic fundamentals are among the factors supporting the ringgit’s growth, even during times of currency weakness, said Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour.
He highlighted that the country’s projected economic growth rate of 4.0-5.0% for this year is also a positive factor that will contribute to the strengthening of the ringgit, moving forward.
“In terms of our economic growth, the financial sector, and so on, we are indeed strong. Currently, these fundamentals remain solid and will only get stronger.
“The economic outlook is positive. These two factors are driving the appreciation of the ringgit,” he said during a TV programme today.
The programme also featured Finance Minister II Datuk Seri Amir Hamzah Azizan.
Abdul Rasheed added that, aside from macroeconomic factors, the structural reforms being implemented by the Madani government also play a critical role in bolstering the ringgit’s strength.
“This is where I have to congratulate the government for undertaking this painful policy reform which is important for the nation as it will strengthen us in the future.
“Investors see our commitment to these structural changes, and it has contributed to the ringgit’s appreciation. It will continue to drive further support for the currency in the future,” he said.
He further emphasised that Malaysia’s monetary policy, particularly in determining the overnight policy rate (OPR), is guided by domestic factors, namely, inflation and the country’s growth prospects.
“Our monetary policy must be aligned with domestic conditions, not external events. Even if the United States Federal Reserve raises or lowers interest rates, it doesn’t provide any direct indication on how we manage monetary policy in Malaysia.
“What we focus on is the impact of changes in the US or other countries on our inflation outlook and economic growth. Currently, at 3.0%, the OPR is supportive of economic growth,” he added. – October 3, 2024