SINGAPORE: Macroeconomic factors may have thrown the ringgit into some volatility, but its fundamental value has remained intact, said Malayan Banking Bhd (Maybank) group chief executive officer (CEO) Datuk Abdul Farid Alias.

He also opined that “uncertainties”, such as the anticipated change in interest rate policy in the United States, are not something to be overly concerned about even though they have the potential impact of drawing foreign funds out of Malaysia.

“Once they start reintroducing [the] interest rate, it means that there is growth in the market. [So] I am not too concerned about movement in interest rates. Of course, there is going to be some short-term impact on currencies around the world … [but] I don’t think there is such a big concern from a fundamental perspective,” Farid told a press conference at the Maybank Invest Asean Conference 2015 here yesterday.

“From a market perspective, there will be some volatility (in the ringgit), but the market will get used to it,” he said.

Putting the ringgit’s recent instability down to “liquidity and fear” within the market, Abdul Farid said the currency should be trading “fundamentally” at 3.3 against the US dollar.

“In the case of the ringgit against the US dollar, taking into account the reserves that we have, [and] the interest rates we have right now, both spot and future, the ringgit should be trading at 3.3 right now but it is not.”

“That is down to liquidity and fear. How long will it go on? I am not sure,” he said.

Abdul Farid’s comments come amid the ringgit’s rapid decline in recent weeks to register its third straight quarterly loss against the greenback. The ringgit ended at 3.7035 against the US dollar yesterday.

On a separate issue, Abdul Farid said Maybank (fundamental 1.5: valuation: 1.3) will continue to focus its attention on the Southeast Asian market this year as the formation of the Asean Economic Community (AEC) is expected to reel in more growth opportunities.

“Our focus is mainly in Asean. We are deeply rooted in this region, more than any other bank [and] we have built our capacities to serve this region,” said Abdul Farid.

According to Maybank’s report titled “Big Ideas: The Charts of Asean” dated Feb, 2015, Asean is expected to experience an acceleration of capital expenditure to fulfil its US$7 trillion infrastructure needs in the next 15 years as trade barriers fall in light of the AEC initiative.

Particularly, the Maybank group is expected to benefit from the region’s need for corporate fundraising activities such as initial public offerings and issuance of debt papers in the bond market from Asean’s need for capital investment.

“Maybank is well-positioned to capture the increase in business and deal flows in the region, as well as those linking to Asia. We have deep understanding of the business landscape in Asean, the network as well as the products to provide seamless solutions for corporates’ trading, funding and investment needs,” said Abdul Farid.

This article first appeared in The Edge Financial Daily, on April 1, 2015.