Only strengthening the Malaysian economy can help increase the rinngit’s value. (Photo: AFP/VNA) The MYR’s performance in 2023 was largely driven by external factors such asthe sharp strengthening of the USD spurred by higher US interest rates as wellas China’s weaker-than-expected economic conditions, he said, adding most ofthe world’s currencies have experienced depreciation for the year, including MYR.
The currency’s value does not depend on fundamentals such as good economicgrowth, good investment, falling inflation or falling unemployment rates, andthe falling value of the MYR is not in line with the economic policiesintroduced by the government.
By only strengthening the local economy can help increase the MYR’s value,he said, highlighting that Malaysia is taking the approach of not increasingthe overnight policy rate (OPR) on consideration of the increase in the valueof the USD.
Besides, the government, through the Bank Negara Malaysia (BNM), has carriedout short-term measures to ensure that the MYR’s adjustment is in order.
In a bid to cope with the volatility of the foreign exchange market, the BNMwill continue to manage risks from domestic and external developments, as wellas be prepared to use its operational policy instruments to ensure orderlymarket conditions.
Several steps were taken by the BNM, including setting exports in MYR.
Indonesia, Thailand and China have accepted payment in MYR, he highlighted,noting that Malaysia was also one of the first countries to sign a currencyarrangement agreement with the People’s Bank of China (PBOC) in 2009, whichfacilitates the use of yuan and MYR for trade and payment purposes between thetwo nations.
Anwar also admitted that it is difficult to completely stop the use of the USDin trade at this time./.
VNA
