KUALA LUMPUR: The current level of the ringgit does not fully reflect the positive prospects of the Malaysian economy, according to Bank Negara Governor Datuk Abdul Rasheed Ghaffour.
The ringgit hit a 26 year low against the US dollar today.
As at 5pm, the ringgit's middle rate against the US dollar was at 4.7975.
Abdul Rasheed said the recent performance of the ringgit, similar to other regional currencies, has been influenced by external factors.
Some of these factors include market adjustment to changing US interest rate expectations, geopolitical concerns and uncertainty surrounding China's economic prospects
Abdul Rasheed in a statement thsi evening said that growth in 2024 will be driven by improvements in external demand and strong domestic spending.
He referenced the latest International Monetary Fund (IMF) forecast, which projects global trade to improve from 0.4 per cent in 2023 to 3.3 per cent in 2024. For Malaysia, exports have shown steady improvements since the fourth quarter of 2023, with January 2024 exports recording a positive growth rate of 8.7 per cent.
Furthermore, Abdul Rasheed said the tourism sector in Malaysia has experienced a strong recovery, with tourist arrivals in 2024 expected to surpass pre-pandemic levels of 26 million.
He said that investment momentum has also picked up, with the implementation of approved projects in both the private and public sectors.
Abdul Rasheed said these positive developments and the government's commitment to implement structural reforms and the expected lowering of interest rates in advanced economies has most analysts forecasting an appreciation of the ringgit this year.