The performance of the ringgit this year has improved

SHAH ALAM: Coordinated actions by the government and Bank Negara Malaysia (BNM) to encourage more consistent inflows in the domestic financial market have had a positive impact on the ringgit’s performance this year.

According to Sinar Harian, an economist from Putra Business School (PBS), Associate Professor Dr Ahmed Razman Abdul Latiff said, until June 20, the ringgit has increased by 1.4 percent compared to the United States (US) dollar.

According to him, it is the only currency in the region that has increased since February 26, but the current exchange rate of the ringgit does not reflect Malaysia’s economic fundamentals and growth prospects.

“Structural reforms will provide more lasting support to the ringgit in the long term and are expected to improve the country’s position in the Global Competitiveness Ranking (WCR) 2025.

“For example, the government’s actions on the medium-term fiscal consolidation plan will ensure fiscal sustainability and improve the redistribution of resources to more productive sectors of the economy.

“This in turn will increase investor confidence and attract inflows. A better fiscal base will also support the evaluations carried out by credit rating agencies,” he said.

Previously, the Prime Minister, Datuk Seri Anwar Ibrahim said, among the causes of Malaysia’s decline in WCR 2024 by the International Institute for Management Development (IMD) was the weak ringgit and the failure to implement targeted subsidies.

Commenting further, Ahmed Razman said that the implementation of diesel subsidy targeting shows structural reform that will reduce the national debt and make fiscal spending more targeted and effective.

“Against the backdrop of low inflation, the effect of diesel subsidy rationalization on the price of other goods and services can be reduced by the government’s vigilance against profiteering under Ops Kesan 2.0.

“In the long term, these structural reforms will provide more lasting support to our economic and ringgit prospects.

“This continuous reform will lay the foundation for a resilient Malaysia and increase its ranking in the WCR,” he said.