KUALA LUMPUR, Nov 13 — The ringgit will stabilise if the uncertainties in the policies of the major economies and the domestic issues are resolved, says Bank Negara Malaysia Governor (BNM), Tan Sri Dr Zeti Akhtar Aziz.
“When the uncertainties and domestic issues are resolved ... I believe the currency will trend better, reflecting our solid fundamentals,” she told reporters after announcing the country’s third-quarter economic performance here today.
Dispelling the perception that domestic issues were the main factors that contributed to the recent ringgit depreciation, she said, the currency actually took a hit from the external factors.
These included the anticipation of adjustments in the policy direction especially by the US Federal Reserve, slump in global oil prices as well as the slowdown in Chinese economy, she said.
Zeti said she was disappointed that the global market has not given due recognition to the fact that Malaysia has a diversified economy where the manufacturing and services sector made up 80 per cent.
Nevertheless, strong fundamentals, comprising strong growth trajectory, current account surplus and trade surplus, as well as solid financial system, would allow flexibility for Malaysia to absorb the shock, she saidd.
Zeti said in the first three quarters of this year, the country has managed to record a five per cent growth in the accumulative gross domestic product, a positive figure as opposed to the target of 4.5-5.5 per cent for this year.
Earlier, she anticipated that inflation would likely increase and to peak in the first quarter of next year at about four-five per cent and moderate thereafter at around three per cent.
However, the moderating consumption demand, coupled with the lower oil and commodity prices, would help offset the rise.
As at Q3, inflation was higher at three per cent mainly due to the increase in prices in food and non-alcoholic beverages and smaller negative contribution from the transport. — Bernama
