He said sentiment for the ringgit has recovered, judging from the currency’s appreciation on Monday despite crude oil prices falling as low as US$27.67 per barrel, the lowest since 2003.

“Oil prices have tumbled to below US$30 per barrel. Previously, if that happened, the ringgit would definitely collapse [but it didn’t].

“The ringgit is no longer seen as a sick currency. Its volatility has come down and its correlation with oil prices has become unpredictable,” he said in his presentation at Export Day 2016 here, today.

Zulkifli was one of the speakers at a session entitled “Global Economic Outlook for 2016”. The event was organised by the Malaysia External Trade Development Corporation.

He said currencies under pressure at the moment are the Colombian peso, Russian ruble and Norwegian krone, clearly due to low oil prices.

South Africa’s currency, the rand, is also performing badly at present due to the low prices of commodities, while its rising government debt was made worse by the recent sacking of the well-respected finance minister, he said.

In 2015, the ringgit depreciated by 18.5 per cent but it was not the worst performing currency in the world. The local unit rebounded beginning from October last year and then became one of the best traded currencies despite the challenging environment, Zulkifli said.

He said the ringgit, which is currently seeking its new equilibrium, was not expected to trade below 4.00 versus the greenback in the near term, given that the United States had raised its interest rates, which would support its currency.

However, the stronger dollar would have a negative effect on the world’s largest economy.

Speaking on the ringgit versus the Chinese yuan, he believed Malaysia’s currency would perform better this year due to improved sentiment.

Nevertheless, he did not expect the yuan to depreciate significantly considering its status as one of the world’s reserve currencies, meaning the government would not allow the currency to drop so much.

The other reserve currencies are the dollar, euro, pound sterling and yen.