Malaysia not headed for currency crisis, economic fundamentals positive, Finance Minister Zahrul says

Kuala Lumpur – Central Bank of Malaysia No drastic intervention to control ringgit valueFinance Minister Tenku Datuk Seri Zahrul Tenku Abdul Aziz said.

“Bank Negara (Malaysia) does not target exchange rates, but strives to avoid dramatic or extreme changes in the value of the ringgit.

“This action will help companies plan while enabling better implementation of business decisions and investments,” he said in response to a question by Pakatan Harapan MP Wong Hon Wai at Dewan Rakyat on Tuesday. rice field.

Mr Wong, MP at Bukit Bendera, Penang, wanted to know about the steps the government is taking through Bank Negara to mitigate the risks associated with foreign exchange rates.

He said one US dollar (S$1.42) was worth RM2.122 during the Asian financial crisis of 1997-1998, while the ringgit now trades at RM4.651 against the US dollar. I’m here.

Zafrul said the country’s economic fundamentals remain strong despite the challenges the Covid-19 pandemic has posed to the global economy.

He cited the introduction of dynamic hedging as an example of reducing currency market and business risk.

He added that this would also include attracting investors to the local bond market while improving the forex.

“Daily forex trading continues to average US$13.3 billion today, compared to US$11.3 billion in 2021, based on two-way trading.”

Finance Minister Zafrul also said the Malaysian economy was not headed for crisis as the situation in 1997 was different.

“Our currency depreciated by almost 54% in 1997, reaching a minimum exchange rate of RM4.88 to the dollar.

“The country’s stock market was also heavily affected, with the Kuala Lumpur Stock Exchange at the time dropping nearly 800 points in just two months, from 1,077 in June 1997 to 262.7 in September.” of Malaysians have lost their jobs.

He also noted that Bank Negara has overcome the ringgit devaluation and raised interest rates to 11% to keep inflation in check.

He said the current situation is different as the country’s economy is more diversified and resilient.

“To date, our Permanent Accounts continue to be positive with a total of RM3 billion in Q1 and RM4.4 billion in Q2.

“So we are facing some challenges due to external factors beyond the control of the government, but our country is not facing or heading towards an economic or currency crisis,” he said. , adding that several other countries are also facing economic challenges due to current global events.Star/Asia News Network