Saturday 13 Apr 2024
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KUALA LUMPUR (Feb 27): The ringgit strengthened against the US dollar on Tuesday as assurances from the government and Bank Negara Malaysia (BNM) regarding the ringgit's valuation calmed market concerns.

At 6pm, the ringgit/US dollar exchange rate stood at 4.7585/7635 compared with 4.7750/7795 recorded at Monday’s close.

Earlier BNM governor Datuk Abdul Rasheed Ghaffour said the ringgit is undervalued.

He said in a statement on Tuesday that the central bank has stepped up its engagements with government-linked investment companies, government-linked companies, corporations and investors to encourage continuous inflows to the foreign exchange market.

Prime Minister Datuk Seri Anwar Ibrahim said the central bank has been assigned to monitor the ringgit closely, and on the government’s side, relevant ministries and authorities, including the investment council, are conducting daily meetings to tackle the issue of the declining ringgit.

Anwar was quoted as saying that the Madani government is not ignoring or taking the decline of the ringgit lightly as it is making continuous efforts to address the issue while simultaneously assuring Malaysia’s investment figures remain intact.

Meanwhile, UOB Kay Hian Wealth Advisors head of wealth research and advisory, designated portfolio manager Mohd Sedek Jantan said market sentiment is poised for the forthcoming policy pronouncements during the upcoming China’s National People’s Congress sessions in March, which are anticipated to foster growth and further bolster the yuan.

“This development is particularly favourable for the ringgit as the significant trading relationship between Malaysia and China underscores a strong correlation between the two currencies.

“Moreover, Malaysia's robust external position, buoyed by ample foreign reserves and consistent current-account surpluses, provides a solid foundation for the ongoing strengthening of the ringgit. This could change the bearish narrative on the ringgit, given the positive outlook on the yuan and Malaysia's economic fundamentals,” he told Bernama.

At the close on Tuesday, the ringgit was traded better against a basket of major currencies.

The local currency improved vis-a-vis the Japanese yen to 3.1671/1706 from 3.1696/1728 on Monday, rose against the British pound to 6.0362/0425 from 6.0552/0609 previously and strengthened versus the euro to 5.1625/1679 from 5.1756/1805.

Meanwhile, the ringgit performed stronger against other Asean currencies.

It edged up versus the Thai baht to 13.2782/2984 from Monday’s close of 13.3190/3375 and was up against the Singapore dollar at 3.5419/5459 from 3.5523/5559 previously.

The local note gained versus the Philippine peso to 8.48/8.49 from 8.51/8.52 on Monday and improved vis-a-vis the Indonesian rupiah to 304.1/304.6 from 305.4/305.9.

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