Companies Urged To Manage Currency Risks Amid Ringgit Movement -- Johari
KUALA LUMPUR, Feb 3 (Bernama) -- Companies must actively manage currency risks through appropriate hedging and business strategies, said Investment, Trade and Industry Minister Datuk Seri Johari Abdul Ghani.
He said fluctuations in the ringgit are a normal market occurrence and part of the broader economic cycle, with their impact differing across sectors depending on business models and market exposure.
“While currency movements may create challenges for some, they also present opportunities for others. What is important is for businesses to manage currency risks effectively by adopting appropriate strategies such as hedging, supply chain protection and customer management,” he said.
He said this when asked by reporters about the strengthening of the ringgit last week, which, for the first time in seven years, reached the 3.9 level against the US dollar, at the official launch of the GD Xchange Experience Centre here today.
Johari said the impact of currency movements depends on the type of business, noting that, for example, commodities and consumer-related businesses require different approaches to managing currency risks.
On Malaysia’s decision to sign the United States’ trade deal under the Agreement on Reciprocal Trade (ART), he said the move was a pragmatic step aimed at avoiding higher tariffs and safeguarding the country’s economic interests.
“Signing the agreement provides Malaysia with space and time to negotiate the terms, while failure to do so could have resulted in immediate tariff hikes that would affect exports and the broader economy.
“The government had carefully weighed the costs and benefits before signing, and it should be noted that the agreement includes an exit clause should it no longer serve Malaysia’s interests,” he said.
The priority, he added, is to ensure that businesses operating in Malaysia are protected and that the economy remains resilient.
Meanwhile, GDEX Bhd managing director Teong Teck Lean said the stronger ringgit is generally positive for the group.
“A stronger ringgit helps reduce costs for services priced in the US dollar, such as software licences and technology subscriptions, making them more affordable compared with periods when the ringgit was weaker.
“From a talent perspective, a firmer ringgit could also help with retention, as the wage gap between Malaysia and neighbouring markets narrows slightly, reducing the incentive for talent to move abroad,” he said at a press conference after the launch.
He added that a stronger ringgit is welcome, as it supports cost efficiency, particularly on the technology side, with no major downside to the group’s core operations.
Also present at the launch was GDEX chairman Tan Sri Muhammad Ibrahim.
GD Xchange is the technology arm of GDEX, representing the group’s transformation from a conventional courier and logistics provider into a fully integrated, technology-driven logistics and distribution ecosystem.
GD Xchange brings together global technology principals, channel partners, and resellers across key areas, including supply chain and commerce, cybersecurity, cloud subscriptions, workspace solutions, smart devices and connectivity, and the electric vehicle ecosystem.
-- BERNAMA