Johari: Three factors have pushed up the ringgit

STRONG economic fundamentals, more foreign investments and higher global oil prices have contributed to the stabilisation of the ringgit, said Second Finance Minister Datuk Seri Johari Abdul Ghani.

He said the ringgit had risen by 4.6% against the US dollar as of July 21.

“Higher oil prices in the first six months of this year and re-entry of foreign investors into the Malaysian equity market were factors for the continued stabilisation of the ringgit,” Johari said in response to a question from Datuk Seri Ahmad Hamzah (BN-Jasin).

He said soaring confidence also added to the ringgit’s strength.

“It was RM4.42 to US$1 at the begining of the year due to the outflow of RM32bil.

“However, in the second quarter, some RM22bil in investments returned to the country and this confidence helped push the ringgit up to RM4.29 against the dollar,” he said.

Johari said a rise in Brent crude oil prices from RM172 (US$40.16) per barrel in the first six months of last year to RM223.60 (US$52.20) in the same period this year had helped stabilise the ringgit.

He pointed out that lower global oil prices had impacted the ringgit more compared to other currencies in the region.

“We are nett exporters of oil and gas, and that is why we feel the impact more than Thailand and China,” he said when answering a supplementary question by Fong Kui Lun (DAP-Bukit Bintang).

Johari said the Government had put in place measures to diversify the economy since 2009 to lessen the impact of lower oil prices.

He said oil and gas contributed 41% to the nation’s revenue in 2009 but had been reduced to just 13% to 14% at present.