Strong Economic Fundamentals Pivotal To Maintaining Ringgit’s Strength, Says BNM Governor

By Karina Imran

KUALA LUMPUR, March 6 (Bernama) -- Malaysia’s strong economic fundamentals, positive growth prospects and ongoing reform measures will continue to support the ringgit in the face of conflict in the Middle East, said Bank Negara Malaysia (BNM). 

In an exclusive interview with BERNAMA, BNM Governor Datuk Seri Abdul Rasheed Ghaffour said that factors such as the monetary policy stance in advanced economies, geopolitical tensions and global financial market conditions play a part in the ringgit’s movement.

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However, it is structural factors such as the strong financial sector and resilient external position which are key drivers supporting the local currency.

The governor also said that reform initiatives undertaken by the government and authorities have improved market sentiment towards Malaysia.

"Malaysia’s economic fundamentals are solid. 

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“By continuing to implement structural reforms, we can safeguard our fundamentals and improve our growth prospects. This will provide enduring strength to the ringgit, even amid global challenges," said Abdul Rasheed. 

Currently, Malaysia's gross domestic product (GDP) is projected to grow by 4.5-4.7 per cent in 2026, from 5.2 per cent in 2025. BNM will publish its growth and inflation forecasts at end-March.

The ringgit, which has been on an uptrend of late, opened marginally higher today at 3.9340/9450 against the US dollar compared with Wednesday’s close of 3.9395/9465 as traders shifted focus to the overnight policy rate (OPR) announcement despite the ongoing conflict in the Middle East.

BNM maintained the OPR at 2.75 per cent.

While acknowledging that the ringgit will continue to fluctuate according to market conditions, Abdul Rasheed expressed confidence that Malaysia’s economic outlook will remain supportive of the currency.

He also acknowledged that the appreciation of the ringgit positively impacts certain groups more than others, and vice versa when it weakens. On this, the governor said that the ringgit is market-determined and stressed that the central bank does not target a specific level for the currency. 

"We don't target a level. The ringgit is market-determined. What is more important is to ensure the ringgit adjusts in an orderly manner. This will help Malaysians and businesses better plan their activities, such as to invest, trade or travel, amid movements in the exchange rate," he said.

-- BERNAMA