Long-term growth key to ringgit's resilience - Economists

SHAH ALAM - Strengthening Malaysia's long-term economic growth is crucial to bolstering the ringgit's value, according to economic experts.

This approach is necessary due to the country's current weak fiscal position, which limits the effectiveness of short-term measures.

Bank Islam's Chief Economist Firdaos Rosli stressed the need for careful planning and long-term strategies to address the ringgit's depreciation.

"In the past, short-term interventions such as monetary adjustments were feasible, but the current circumstances demand more time and meticulous planning," he said during an interview with Sinar yesterday.

His remarks came in response to a report by MIDF Research predicting a potential strengthening of the ringgit later this year, contingent upon changes in the policy stance of the US Federal Reserve (Fed) regarding interest rates.

Addressing the factors influencing the ringgit's depreciation, Firdaos pointed to trade composition as a significant determinant, particularly in nations lacking natural resources.

Unlike countries such as Singapore, Switzerland, and Taiwan, whose export prices are largely dictated by global demand, Malaysia's economy, reliant on resources like oil, gas, rubber, and palm oil, is sensitive to fluctuations in the US dollar.

Firdaos also highlighted geopolitical considerations as intangible yet influential factors impacting the ringgit's value.

Echoing similar sentiments, Putra Business School (PBS) Associate Professor Dr Ahmed Razman Abdul Latiff placed emphasis on the pivotal role of tourism in fortifying economic performance amid ringgit depreciation.

Razman urged the public to support domestic tourism endeavors, thereby curbing the outflow of the ringgit associated with overseas travel.

"By patronising local tourism destinations, especially in each state's unique locales, we can stimulate economic activity and foster growth," he said.

He further advocated for the exploration and promotion of lesser-known tourist attractions, positing them as viable opportunities for supporting local businesses and enhancing the nation's economic resilience.