The current weakening of the ringgit is not as bad as during the 1997/98 Asian financial crisis due to the prevailing strong fundamentals, Minister in the Prime Minister's Department Abdul Wahid Omar said.

He said the local banking system, coupled with the economic activities, were still intact to drive economic growth, and the country was still on track to achieve gross domestic product growth of between 4.5 percent and 5.5 percent this year.

"Back in 1997 and 1998 (Asian financial crisis), we were hit very bad," he said, adding that many factors had affected Malaysia then, including trade deficit, reserve falling below US$30 billion and high level of borrowings among companies.

"Our current position has changed tremendously where we have recorded consistent trade surplus, our reserve is about three times bigger since then, and our corporate debt level is actually much lower," he told reporters after the GLC Open Day Forum 1 in Kuala Lumpur today.

In terms of the banking system, Wahid said the banks were now well managed and capitalised with good liquidity and assets quality, and the net import loan ratios stood at 1.2 percent level, regulated and supervised by the central bank.

The local currency continued its downtrend, closing lower against the greenback today at 3.9220/9250 from 3.9005/9035 yesterday.

At the close, the ringgit eased 0.6 percent to 3.9280 against the US dollar, its weakest since Sept 2, 1998, the day before Malaysia pegged it at 3.8000 against the greenback during the Asian financial crisis.

- Bernama