by SHAUQI WAHAB / pic TMR FILE

THE Malaysian ringgit is currently undervalued between 8 to 10%, says Finance Minister II Datuk Seri Amir Hamzah Azizan.

He told Dewan Rakyat that analysis by several bankers showed that the ringgit is actually stronger than it is indicated now.

“If we look at the analysis by bankers, it is likely that the ringgit is undervalued between 8% and 10% compared to the level where it should be at the moment.

“We feel that the ringgit will strengthen. Based on analysis by bankers, the ringgit should be at RM4.50 (against the US dollar) before the end of this year,” he said during the Minister Question Time in Parliament today.

He was responding to an additional question raised by Lim Guan Eng (PH-Bagan) on how undervalued was the ringgit and when will the Malaysian currency reflect its fair value.

Amir Hamzah added that there is no need to peg the ringgit against the US$ or impose currency restrictions as what was done previously during the Asian Financial Crisis (AFC) in 1997/98.

He said this was because Malaysia’s economic fundamentals remain strong with economic growth projected to be between 4% and 4.5% in 2024 unlike during the AFC.

As such he said the ringgit will eventually get stronger this year 

“So, we are sure it won’t be a bigger issue than now, but if there’s any drop, Bank Negara Malaysia and government-linked companies (GLCs) are ready to make the ringgit stronger.

“This joint action can encourage the GLCs to bring back foreign investment income and convert it into ringgit in a more consistent manner,” he said.