Malaysian Economy Strong Despite Poor Ringgit Performance – BNM Governor


The Governor of Bank Negara Malaysia (BNM), Datuk Abdul Rasheed Ghaffour said some of the current factors include the market's adjustment to expected changes in United States (US) interest rates, geopolitical concerns and uncertainty surrounding China's economic prospects affecting the performance of the ringgit and other regional currencies. .

BNM is of the view that the current level of the ringgit does not reflect the positive outlook of the Malaysian economy which is recovering well.

He also said growth in 2024 will be driven by an increase in external demand and strong domestic spending.

The International Monetary Fund's (IMF) latest forecast is that global trade will increase from 0.4% in 2023 to 3.3% in 2024.

In Malaysia, the export sector has shown a more stable increase since the fourth quarter of 2023 and in January 2024 it was more positive by growing by 8.7%.

In addition, the tourism sector is also recovering strongly with tourist arrivals in 2024 expected to surpass the pre-pandemic level of 26 million people.

Investment momentum has increased with the implementation of approved projects in the public and private sectors.

In his comments, the positive developments and the government's commitment to implement structural reforms as well as the expected reduction in interest rates led most analysts to predict that the ringgit will rise this year.

Now, the level of the ringgit is on the verge of peaking after reaching RM4.80 earlier this week. If re-opened, the national currency reached the lowest level in history which was RM4.88 in January 1998 which was at the height of the Asian Financial Crisis.