Ringgit In Right Direction Despite Uncertainties Caused By US Trade War - BNM Governor

KUALA LUMPUR, Feb 17 (Bernama) -- The ringgit is moving in the right direction despite the uncertainties caused by the United States’ (US) trade war, said Bank Negara Malaysia (BNM) governor Datuk Seri Abdul Rasheed Ghaffour.

He emphasised said that Malaysia’s strong fundamentals and positive prospects are key factors supporting the ringgit.

“The ringgit is heading in the right direction. Given the narrowing interest rate differential we’re seeing, it should bode well for the ringgit.

“Considering the strong economic fundamentals and prospects that we have, I believe these factors are all positive for the ringgit,” he said during a panel discussion titled ‘Reimagining Trade and Global Supply Chains for a Resilient Future’ at the China Conference: Southeast Asia 2025 here, today. 

Abdul Rasheed made these remarks in response to a question about the forecast for the ringgit by the end of the year, despite uncertainty caused by the US trade war. 

“We (BNM) don't set any targets for the ringgit, and as you’ve have seen, it fluctuated last year, where it went to and where it is today.

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“But what's more important is that our main role is to ensure that there's no excessive volatility that could impact business decision-making,” he added. 

Meanwhile, he stated that advancing the ASEAN financial system, building a resilient supply chain, and strengthening climate resilience are the three key areas that will further enhance ASEAN integration. 

“This is how we want to secure ASEAN's economy. How do we achieve this? For example, ASEAN is one of the most climate-vulnerable regions, accounting for over 50 per cent of the global economic losses from  disasters.

“Hence, despite recent global policy shifts, addressing climate risk remains critical to ensuring supply chain resilience in ASEAN,” he said. 

Abdul Rasheed further noted that ASEAN has both the knowledge and the tools to fortify its supply chain resilience, particularly through three key initiatives. These include mobilising more financing for climate adaptation and decarbonisation efforts.

“In terms of the funding gap, we are facing an annual funding gap of about US$100 billion. The ASEAN+3 Green Bond market grew by 30 per cent in 2023, while the ASEAN Catalytic Green Finance Facility has mobilised about US$1 billion for climate-supporting infrastructure,” he said. 

He also emphasised that ASEAN must invest in infrastructure that could withstand climate shocks. “Floods alone could cost ASEAN economies more than US$20 billion,” he said.

“Lastly, we must urgently transition to clean energy to reduce emissions. ASEAN actually needs about 50 per cent renewable energy share in its capacity by 2040,” he said, adding that to secure a low-carbon future, ASEAN must prioritise the success of the ASEAN Power Grid project, which aims to expand cross-border energy trade.

Abdul Rasheed said that within ASEAN, regional central banks as well as BNM are also working together including in the ASEAN taxonomy for Sustainable Finance.

-- BERNAMA