KUALA LUMPUR, March 12 — Investment, Trade, and Industry Minister Datuk Seri Tengku Zafrul Abdul Aziz addressed concerns over the low ringgit rate, asserting that it does not accurately reflect the state of the economy. In an interview with CNBC, Zafrul attributed the all-time low of the ringgit in 26 years to various factors, primarily the interest rate differential between Malaysia and other countries, particularly the United States.
While acknowledging the interest rate decisions made by Bank Negara Malaysia, Zafrul pointed out positive economic indicators such as a manageable inflation rate of 2.5 per cent, last year’s growth of around 3.7 per cent, and an unemployment rate of approximately 3.3 per cent. He expressed confidence in the projected growth rate of four to 5 per cent for the current year, suggesting that these factors justify Malaysia’s current interest rates.
Despite acknowledging the undervaluation of the ringgit based on the country’s economic performance, Zafrul highlighted the relative strength of Malaysia’s stock market, which has seen a year-to-date performance of around 5 per cent. His comments come amidst the ringgit’s depreciation, hitting a 26-year low on February 20, falling to RM4.7965 against the US dollar, prompting discussions about the driving factors behind its decline and whether the worst is over.
