Don't panic, ringgit will bounce back, says minister

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The ringgit, which has weakened along with other emerging market currencies against the US dollar, has all the strength to bounce back, said Second Finance Minister Johari Abdul Ghani.

"We should not panic," Johari said.

"We have the ecosystem to make it right, ensure political stability is intact and (continuously) apply the right policies to facilitate investors," he said when asked on the ringgit's decline to 4.4805 per US dollar earlier today.

There was no need for capital control or to peg the ringgit as Malaysia is an open economy, Johari told reporters after witnessing the signing of strategic agreements between Amanah Raya Bhd and Kenedix Inc, Japan.

He said with all key factors in place, the ringgit would bounce back.

Asked on the fair value for the local currency, he said: "It depends at what point you come in, if you come at 3.30-level you would want the ringgit to be at 3.30 and if you come at 3.80-level you want it to be at that level."

The ringgit and other emerging currencies declined against the US dollar following the US Federal Reserve's interest rate hike on Wednesday last week.

It had hinted of more rate hikes in 2017.

Johari said the number of interest rate increases by the US depended on president-elect Donald Trump's policy and that Malaysia would have to wait and see.

"At the end of the day, currency fluctuation is part of the mechanism, and you need to adjust according to the supply and demand," he added.

- Bernama

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