KUALA LUMPUR: The ringgit will stabilise if the uncertainties in the policies of major economies and the domestic issues are resolved, says Tan Sri Dr Zeti Akhtar Aziz.
“When the uncertainties and domestic issues are resolved … I believe the currency will trend better, reflecting our solid fundamentals,” the Bank Negara Malaysia Governor told reporters after announcing the country’s third-quarter economic performance here Friday.
Dispelling the perception that domestic issues were the main factors that contributed to the recent ringgit depreciation, she said the currency actually took a hit from external factors.
These included the anticipation of adjustments in the policy direction especially by the US Federal Reserve, slump in global oil prices as well as the slowdown in Chinese economy.
Zeti said she was disappointed that the global market has not given due recognition to the fact that Malaysia has a diversified economy where the manufacturing and services sector made up 80%.
Nevertheless, strong fundamentals, comprising strong growth trajectory, current account surplus and trade surplus, as well as solid financial system, would allow flexibility for Malaysia to absorb the shock, she said.
Zeti added that in the first three quarters of this year, the country has managed to record a 5% growth in the accumulative gross domestic product, a positive figure as opposed to the target of 4.5-5.5% for this year.
Earlier, she anticipated that inflation would likely increase and to peak in the first quarter of next year at about 4-5% and moderate thereafter at around 3%.
However, the moderating consumption demand, coupled with the lower oil and commodity prices, would help offset the rise. – BERNAMA