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Don’t compare current ringgit slide to 1998 decline, says Anwar

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Prime Minister Anwar Ibrahim says conditions were different in 1998.

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Free Malaysia Today
Anwar said Malaysia now enjoys investor confidence.

KUALA LUMPUR:
The current decline in the value of the ringgit cannot be likened to its fall during the Asian Financial Crisis in 1998 as the country has a more stable economic foundation now, says Prime Minister Anwar Ibrahim.

The ringgit has slid by over 4% so far in 2024, adding to losses from the previous three years. It opened at 4.7745/4.7800 to the US dollar today, compared with yesterday’s close of 4.7710/4.7800

The ringgit slid to 4.7965 against the dollar on Tuesday, its weakest level since an all-time low of 4.8850 in 1998 following the fallout from the regional financial crisis.

Speaking to reporters after officiating the opening of the Tun Razak Exchange Financial Hub at the Exchange 106 Tower here today, Anwar, who is also the finance minister, said the ringgit’s drop in 1998 came amid increases in the inflation and unemployment rate.

Anwar, who was also the finance minister then, said Malaysia found it hard to attract foreign investment during the period, which he said was a stark contrast to the current investor confidence the country enjoys.

“It (the ringgit’s performance) is concerning, we are looking at it. Luckily, it has strengthened a little, but look at the overall (economic performance),” he said.

“(New) investment is the highest ever in the country, inflation (is) down, unemployment (is) down and our growth is sustainable compared to our neighbours.”

Yesterday, Anwar said Malaysia saw a record-high of RM329.5 billion in approved investments last year, a 23% increase from 2022’s total of RM264.6 billion.

The country’s inflation rate stood at 1.5% as of last December, while the unemployment rate in the fourth quarter of 2023 was 3.3%.

Malaysia’s economy recorded a 3.7% growth overall in 2023, down from 8.7% in 2022.

On Tuesday, Bank Negara Malaysia governor Abdul Rasheed Ghaffour said the ringgit’s recent sharp drop did not reflect the “positive prospects” of the Malaysian economy.

In a statement, he said the recent performance of the ringgit, similar to other regional currencies, had been influenced by “external factors” that included market adjustment to changing US interest rate expectations, geopolitical concerns, and uncertainty surrounding China’s economic prospects.

“BNM is of the view that the current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward,” he said.

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