Strong Economic Fundamentals, Ringgit Appreciation Boost Investor Confidence - MoF

KUALA LUMPUR, Oct 18 (Bernama) — Malaysia’s strong economic fundamentals and favourable growth prospects will enable the country to attract high-quality investments and position Malaysia as a preferred destination for investors.

The Ministry of Finance (MoF), in its Economic Outlook 2025 report released today, stated that the steady monetary policy, fortified by ongoing reforms and a robust domestic financial market, continues to foster sustainable economic growth while maintaining price stability.

“Similarly, the domestic financial market remains vibrant, effectively supporting financing requirements following stronger economic activities.

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“Meanwhile, the improved performance in the local stock market and the rebound in the value of the ringgit underscore the government's unwavering commitment to uplifting the nation's economic status, in line with the aspirations of the MADANI Economy framework,” the ministry said.

MoF noted that Malaysia’s financial market remains resilient and orderly.

“Anchored by the MADANI Economy framework, the domestic financial market continues to play a significant role in supporting economic growth, supported by well-capitalised financial institutions and a well-functioning capital market,” it added.

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MoF stated that the monetary policy stance remains unchanged, with the overnight policy rate (OPR) maintained at 3.00 per cent, in line with inflation expectations and the overall state of the economy.

“However, market volatilities arising from external headwinds, including heightened geopolitical tensions, extended periods of high global interest rates, slow growth in China, and the outcome of the United States presidential election, will pose challenges to the domestic financial market,” it stated.

MoF also indicated that Bank Negara Malaysia’s (BNM) policy direction is expected to be forward-looking, focusing on maintaining price stability to facilitate sustainable domestic economic growth going into 2025.

Regarding the ringgit, the ministry stated that the currency has recovered from three years of losses, stemming from the strength of the US dollar, and rebounded to its 18-month record high of RM4.3205 against the US dollar, appreciating by 6.4 per cent (year-to-date) as of the end of August 2024.

“The key drivers for the ringgit’s appreciation include the strong domestic economy, a recovery in exports, and positive impacts from coordinated efforts by the authorities to encourage the repatriation and conversion of foreign income proceeds by government-linked companies, government-linked investment companies, and corporates.

“Additionally, the confluence of positive factors such as a favourable economic outlook, ongoing structural reforms, and positive assessments from international rating agencies and analysts have restored investors' confidence in Malaysia as a viable investment destination,” said MoF.

Overall, these factors have pushed the ringgit to become one of the strongest currencies in Asia, the ministry added.

“A whole-of-nation approach, including measures to further strengthen the economy through the MADANI Economy framework and its policy levers, is expected to support and increase the value of the ringgit,” it said.

-- BERNAMA