KUALA LUMPUR – The ringgit is projected to strengthen in the coming year, driven by improvements in the development market and the implementation of various projects attracting foreign direct investment (FDI).
Bank Negara Malaysia (BNM) Deputy Governor Adnan Zaylani Mohamad Zahid said that the anticipated increase in the development market next year would contribute to the overall strengthening of currencies in the region, with a positive impact on the ringgit.
“Our current economic fundamentals are positive. The government has made numerous announcements this year, including those related to infrastructure projects, the New Industrial Master Plan 2030 (NIMP 2030), and other ongoing initiatives, including significant updates on FDI.
“We expect FDI to begin flowing into the market in the next quarter, creating additional momentum for the ringgit.
“We are optimistic about the ringgit’s outlook for the coming year, and many market analysts are also predicting a stronger ringgit,” he said during the ‘BNM Media Workshop 2023’ earlier tonight.
Previously, BNM Governor Datuk Abdul Rasheed Ghaffour said that the ringgit is expected to recover, along with other emerging market currencies, once central banks in advanced economies complete their interest rate hikes.
Despite the ringgit’s weakening throughout this year, Rasheed said Malaysia’s current interest rates are sufficient to support the economy.
The local currency had depreciated to nearly RM4.80 against the United States (US) dollar in October, marking its weakest level since the height of the Asian Financial Crisis (AFC) in 1998.
It remains one of the weakest-performing currencies among emerging Asian countries this year, with a 6.0% decline against the US dollar.
Meanwhile, Adnan emphasised the crucial role of the media in educating and informing the public about factors influencing the fluctuation of the ringgit’s value.
He highlighted that accurate reporting is essential for building confidence, whereas biased or sensationalist writing can instill fear and erode trust, especially in the currency exchange market, where confidence and trust are paramount for major players. – December 5, 2023