KUALA LUMPUR: The ringgit has yet to reach its fair value despite its recent rise against the US dollar and emerging as Southeast Asia’s best-performing currency, says Prime Minister Datuk Seri Anwar Ibrahim.
“It is still undervalued (even) at RM4.10 per US dollar. People know it used to be RM3.80, but it is wise for it to strengthen gradually without intervention.
“Let the market forces play. This would reflect confidence in government policies and how we implement reforms,” he told CNBC in an interview on Friday (Oct 10).
On a Friday-to-Friday basis, the ringgit fell to 4.2155/2240 against the US dollar, down from 4.1230/1280 the previous week.
BMI Country Risk & Industry Research (BMI), a unit of Fitch Solutions, revised its end-2024 forecast for the ringgit to RM4.00 per US dollar from RM4.55 previously, reflecting the currency’s performance in the third quarter of 2024.
Some analysts are more optimistic, predicting the ringgit could reach RM3.55 against the greenback.
While acknowledging that a stronger ringgit might raise concerns among exporters, given Malaysia’s role as an export-driven economy, Anwar, who is also Finance Minister, said the issue is not significant as the currency remains undervalued.
“Yes, it will cause some concerns among exporters, but not too many and not too serious, as the ringgit is still undervalued. However, it has benefited immensely because we are a trading nation and import a lot from overseas,” he said when asked whether a stronger or weaker ringgit would be more favourable for Malaysia. – Bernama
