ASSESSMENT of the ringgit’s position and growth needs to be done holistically to determine the local currency’s actual performance, instead of merely measuring it against the United States (US) currency, which is on the rise compared to most world currencies, says Deputy Finance Minister Datuk Mohd Shahar Abdullah.
He said the ringgit had declined by 6.2% versus the US dollar since early 2022, which is in line with the performance of regional and developed countries’ currencies which depreciated between 2.8% and 16.4% as of July 22, reported Bernama.
“The overall strengthening of the US dollar was driven by the aggressive rate hike in the US, the global risk-off sentiment following the conflict in Ukraine and modest growth expectations in China.
“As such, the government will continue to manage risks from domestic and external developments, and Bank Negara is also prepared to use its operational policy instruments to prevent significant fluctuations in the ringgit exchange rate,” he told Tengku Zulpuri Raja Puji (DAP-Raub).
The MP asked about the effective measures taken to address the nation’s economic downturn, the sharp drop in the value of the ringgit and the significant increase in the cost of living.
Mohd Shahar said the position of the ringgit is very important to ensure that the country’s economic journey is at an optimal level, but it is unfair for it to be compared to the US dollar alone.
He noted that year-to-date, the ringgit had increased compared to several major currencies such as the Japanese yen, British pound, euro, the Philippine’s peso and Thailand’s baht.
Mohd Shahar also said the country’s economic growth should also be evaluated through economic performance indicators, namely retail and wholesale trade, unemployment rate, industrial production and national trade.
He said this in reply to Datuk Seri Shamsul Iskandar Mohd Akin (PH-Hang Tuah Jaya) who asked about the Finance Ministry’s strategies to ensure that the ringgit remains competitive.