The recent performance of the ringgit, similar to other regional currencies, has been influenced by external factors. Some of these factors include 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.

Growth in 2024 will be driven by the improvement in external demand and strong domestic spending. The latest IMF forecast is for global trade to improve from 0.4% in 2023 to 3.3% in 2024. For Malaysia, exports have shown steady improvements since the fourth quarter of 2023. In fact, the recently-released January 2024 exports have turned positive (+8.7%). The tourism sector has recovered strongly with tourist arrivals in 2024 expected to exceed the pre-pandemic levels of 26 million. Investment momentum has picked up with the implementation of approved projects both in the private and public sectors.

Reflecting these positive developments, the Government’s commitment to implement structural reforms and the expected lowering of interest rates in advanced economies, most analysts are forecasting for the ringgit to appreciate this year.

Abdul Rasheed Ghaffour
Governor of Bank Negara Malaysia
20 Feb 2024