Malaysia's central bank made a statement on Tuesday, indicating that the country's currency, the ringgit, is undervalued. They argue that it should be trading at a higher value considering the prevailing economic conditions. These comments were made as efforts to bolster the ringgit, currently at a 26-year low, are underway. Bank Negara Malaysia Governor Abdul Rasheed Ghaffour stated that the ringgit's higher value should reflect the robust economic fundamentals and opportunities present in Malaysia.
Just last week, after the ringgit had dropped to a 26-year low of 4.880 against the U.S. dollar, the central bank assured markets of these positive fundamentals. The blame for the currency's weakness was assigned to external elements rather than intrinsic economic issues.
The South Asian currency has seen an approximately 4 percent depreciation this year. To combat this drop-off, the central bank has liaised with government-associate investment institutions, corporations, and investors. Their objective is to stimulate continued inflow into the foreign exchange market, according to the Central Bank Governor.
Prime Minister Anwar Ibrahim also expressed his worries over the ringgit's slump, showing unease about its decline to the lowest level since the Asian Financial Crisis. The Prime Minister insisted that the ringgit should be sustainable due to the country's robust economic fundamentals, also attributing the currency's decline to extraneous factors.
The ringgit was reported to be trading around 4.777 against the dollar on Tuesday.
