KUALA LUMPUR, Feb 16 — The ringgit reversed its downtrend and appreciated by 10 per cent from November 1, 2022 to February 8, 2023 to hit RM4.2983 against the US dollar, according to the Ministry of Finance (MoF).
The MoF said this followed the expectation of a slower interest rate hike in the United States since November 2022, leading to improved global investor risk sentiment.
“The ringgit was also stronger compared to the currencies of Malaysia’s main trading partners, as reflected by the ringgit’s nominal effective exchange rate (NEER), which increased by 3.2 per cent over the same period,” the ministry said in a written reply to a question from Labis MP Pang Hok Liong.
The ministry said it is important to note that the flexible exchange rate regime has helped Malaysia weather a major shock following the significant strengthening of the US dollar in 2022.
“The country’s economy remains stable with rapid annual growth of 8.7 per cent last year (2021: 3.1 per cent).
“Inflation is still under control despite being at a high level, and there is no major imbalance in the country, despite facing this major external shock,” it said.
The MoF said Bank Negara Malaysia’s approach would focus on ensuring that the ringgit adjusts in an orderly manner, thus helping businesses plan and implement spending and investment decisions well.
The risk from a sharp depreciation in the ringgit’s exchange value against the US dollar would also be mitigated by the use of hedging instruments, emphasis on prudent external borrowings, and a deep domestic currency market, it added.
— Bernama
