Economist: Reduced jail-time, fine for former PM Najib unlikely to move the needle for ringgit, stock market

KUALA LUMPUR: The reduced sentence for Datuk Seri Najib Razak is not expected to affect the performance of the ringgit and local stock market excessively Monday, as the country's fundamentals remain intact.

Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan sees no substantial impact on the ringgit, as the stability of the government and the fundamentals of the economy remain unaffected directly.

"Foreign investors are expected to reassess positively, acknowledging Datuk Seri Anwar Ibrahim as the prime minister alongside government stability, including UMNO. The stability of the government will likely be re-evaluated on a positive note.

"Malaysia has adhered to the rule of law in granting a pardon to Datuk Seri Najib Razak, even though he is an ex-prime minister, despite the VVIP treatment in the pardon process.

"The adherence to legal procedures gives foreign investors confidence that Malaysia operates within the confines of the law, thus boosting confidence in the government's commitment to legal processes," said Azmi.

The reduced sentence for Najib is expected to generate a positive market response albeit not excessively.

Azmi said the more crucial aspect is the impact on government stability, which is deemed more robust with the decision to reduce Najib sentence.

"This increased stability is likely to boost investor confidence, both domestically and among foreign investors. The anticipation is that current economic policies will remain unchanged until the next general election," he told Business Times.

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