Friday 29 Mar 2024
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KUALA LUMPUR (July 11): Malaysia appears to be on stronger footing to weather existing domestic political and external market storms compared to the 1997/1998 Asian financial crisis.

The Edge Malaysia business and investment weekly (Edge Weekly), quoting economists, reported in its latest July 13-19 issue that the country's fundamentals were much stronger today. This took into account the fact that the economy was still growing and the nation's higher foreign currency reserves.

“As for our fiscal deficit, it has always been there since the 1997/98 crisis. We are still below
the self-imposed limit of 55% of gross domestic product, and our budget deficits continue
to narrow — 3.5% last year and a target of 3.2% this year.

“We do not have a crisis on our hands despite what the weakening ringgit might suggest," independent economist Lee Heng Guie was quoted as saying.

Over the past one year, the ringgit had weakened to 3.7940 against the US dollar as at yesterday compared to the strongest level at 3.1415 seen on August 28, 2014. Besides the stronger US dollar, the ringgit had also weakened on lower crude oil prices and Malaysian political uncertainties.  

Malaysia has been in the spotlight as investigation on 1Malaysia Development Bhd (1MDB) is in progress amid allegations that some US$700 million (RM2.66 billion) was deposited into Prime Minister Datuk Seri Najib Tun Razak's bank accounts.

Globally, Malaysia is contending with market volatility from Greece's debt crisis, besides the prospect of US interest rate hike this year. Both factors have resulted in a stronger US dollar against world currencies.

For a better understanding on the Malaysian economy amid domestic and global dynamics, kindly pick up and read the latest issue of Edge Weekly.

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P/S: The Edge is also available on Apple's AppStore and Androids' Google Play.

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