PETALING JAYA: Malaysia’s central bank cautioned that the ringgit’s outlook may remain uneven amid fluctuating expectations on global monetary policy, and pledged to preserve confidence in the currency that remains one of Asia’s worst-performers.
Bank Negara Malaysia governor Abdul Rasheed Ghaffour said he was mindful that a “persistent and material undervaluation of the ringgit” could have permanent implications on the economy, if not addressed.“As the global monetary policy tightening cycle has likely peaked, financial markets expect pressure on the ringgit to abate.
The ringgit succumbed to renewed pressure in the past week as bond traders scaled back their US interest-rate cut forecasts ahead of Wednesday’s Federal Reserve meeting.“On and off, we may see changing and differing market expectations regarding the monetary policy trajectory of advanced economies.He said the central bank is working with the government to increase inflows and allow the currency to better reflect economic fundamentals and prospects.
Malaysians have until the end of March to update their income details in a central database known as Padu, which authorities will then use as a guide to identify those eligible for government programmes, aid, and subsidies. Improving investor sentiment as a result of the government’s spending reforms will also “help reinforce the value of the ringgit and ensure that it appropriately reflects our strong domestic fundamentals,” he added.BNM, in its report also trimmed its 2024 headline inflation expectations to range within 2%-3.5%, compared with its earlier forecast of 2.1%-3.6%.
“Looking to 2024, there is room for optimism even as the external environment remains highly uncertain.
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