Economy Minister Expects Ringgit Recovery In 2024

Malaysian Economy Minister Rafizi Ramli wrote on X that currency strength is just one of the indicators of the country's economic position and argued that Malaysia can boast solid performance on all other metrics, such as GDP growth and inflation dynamics, since the current administration took power.

• The Minister attributed much of ringgit weakness to USD appreciation, noting that the local currency outperformed many other major currencies in 3Q2023. It is worth noting that while the MYR was indeed one of the best EM performers in Q3 (5th place among 23 EM currencies tracked by Bloomberg), it has had a weak start to Q4, being the 6th weakest EM performer since end-September.
• Rafizi wrote that the ringgit "is expected to strengthen in 2024 due to several factors, including better government fiscal discipline, better global economic growth and the easing of US currency policy uncertainty". He wrapped up by pushing back against the opposition Perikatan Nasional's criticism of the government's economic policies.
• Spot USD/MYR trades -182 pips at 4.6528 at typing after printing its worst levels in three weeks. From a technical perspective, a dip through Nov 6 low of 4.6280 would support the bearish case.