KUALA LUMPUR, March 20 (Xinhua) — The ringgit remains undervalued and does not reflect Malaysia’s positive economic fundamentals and prospects, the Malaysian central bank said Wednesday.

Bank Negara Malaysia (BNM) said in its 2023 second half Financial Stability Review report that the financial markets continue to expect the ringgit to trade stronger as pressure from external factors abates.

According to the bank, coordinated actions by the government, BNM, government-linked companies (GLCs) and government-linked investment companies (GLICs) to increase flows into the foreign exchange market on a more sustained manner have helped preserve orderly conditions and support for the ringgit, while encouraging more consistent repatriation and conversion of foreign investment income by corporates and other investors.

Over the medium-term, it said the ongoing structural reforms by the government, which will raise Malaysia’s productivity and competitiveness, will provide more enduring support to the ringgit.

Since the beginning of 2024, the ringgit has depreciated by 1.8 percent against the U.S. dollar.

This was mainly driven by the broad U.S. dollar strength as markets pared down expectations on federal funds rate (FFR) cuts as well as uncertainties surrounding the outlook for global growth.