KUALA LUMPUR: The ringgit is recovering and stabilising after facing external pressures, says Bank Negara Malaysia governor Datuk Abdul Rasheed Ghaffour.
"The ringgit's value had plummeted but is now surging following several strategies implemented by Bank Negara and the government," he said in a special interview with Buletin Utama tonight.
Abdul Rasheed said the ringgit has strengthened by 1.2 per cent against the US dollar and by 2.6 per cent against major trading partners since February, making it the best-performing currency among 10 regional countries.
Despite these gains, the ringgit is still considered undervalued, indicating significant potential for further appreciation, based on strong economic fundamentals.
Among the strategies implemented are encouraging government-linked companies to repatriate overseas earnings and convert them to the ringgit.
"This initiative is a focal point in discussions between Bank Negara and over 150 trading companies," he added.
Abdul Rasheed also said engagement with foreign investors has led to positive outcomes, with increased foreign funds flowing into the country.
"We have provided flexibility for companies to convert export earnings to ringgit and re-invest them later. This pilot program with a few companies has shown promising results," he said.
Bank Negara is confident that the ringgit will continue to strengthen, supported by efforts to promote the use of local currency in trade.
It is also enhancing the local currency settlement framework with China, Thailand and Indonesia.