"…I think the main issue for investors is more about [ensuring] that we have continuous consistent policies and [that] we have [a] good talent pool to support their growth, rather than short-term fluctuations in currency.” — Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz
SHAH ALAM (July 3): The depreciation of the ringgit in recent months is unlikely to boost investment as investors prefer consistent policies over short-term currency fluctuations, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz.
He said that foreign investors take a long-term stance on the country’s economic fundamentals despite the weaker ringgit increasing their purchasing power.
“Investors will have a long-term horizon and I think the strength of any particular currency, in this case ringgit, will be determined by their [foreign investors] view of our economic fundamentals, right?
“I talked to them, I think the main issue for investors is more about [ensuring] that we have continuous consistent policies and [that] we have [a] good talent pool to support their growth, rather than short-term fluctuations in currency,” he told reporters here after attending the joint venture announcement ceremony between Proton Holdings Bhd and Aapico Hitech PCL.
The ringgit was under heavy selling pressure since early May, when the currency was trading circa 4.4500 against the US dollar, before depreciating near the 4.7000 level in late June amid expectation of further monetary tightening by major central banks globally and rising political uncertainties domestically as six of Malaysia's 13 states are poised for state elections anytime within July and August.
Tengku Zafrul also said the government would prioritise streamlining the process foreign investors must endure when investing in Malaysia.
“Malaysia has 31 investment promotion agencies (IPA), all of them have been successful in attracting and facilitating investment into the country. What we want to do now is to have a more coordinated approach, because we want to market Malaysia as one consistent message,” he explained.
Tengku Zafrul said this is part of the government’s effort to keep the country on par with regional competition in attracting foreign direct investments.
“We are still [enjoying] high competitiveness, but we don’t want to be complacent because neighbouring countries are moving very fast,” he said.
Earlier at the event, Tengku Zafrul in his speech said while attracting high-quality investments remains a priority for the government, it is equally important to consider the spillover effects that each investment brings.
“Guided by the New Investment Policy (NIP), the projects undertaken should not only create high-value job opportunities but also extend domestic linkages while prioritising ESG considerations. This holistic approach will ensure a balanced and inclusive growth for the nation,” he said.
Malaysia’s automotive industry contributes approximately 4%-5% to the nation’s gross domestic product (GDP) on average.
Last year, the automotive sector contributed RM64.5 billion to GDP, and the government is aiming to increase it to RM104.2 billion by 2030 under the National Automotive Policy, a blueprint that aims to position Malaysia as a regional automotive hub.