‘Seek innovative ways to stay competitive’

KUALA LUMPUR: The business sector should stop counting on the value of the ringgit to boost its competitiveness, Finance Minister Tengku Zafrul Tengku Abdul Aziz said yesterday.

Instead, he said, businesses should focus on raising productivity, increasing innovation and reducing costs.

The value of the ringgit would be driven mainly by the country’s strong economic fundamentals and the government will focus on efforts to improve its resilience by diversifying sources of growth as well as strengthening its competitiveness and fiscal position, he added.

He was responding to a question from Senator Datuk Teo Eng Tee @ Teo Kok Chee (Gerakan) at the Dewan Negara yesterday.

Teo had asked for details on measures taken by the ministry to curb ringgit depreciation.

As of Sept 18, the ringgit had depreciated further against the US dollar following uncertain geopolitical developments and dampened investor sentiments in the world’s financial markets triggered by Covid-19 and falling oil prices.

Zafrul said given Malaysia’s position as a net exporter, a competitively valued ringgit would bring advantages.

“The flexible exchange rate plays an important role in cushioning the shocks from the changing external environment so that domestic economic activities are not adversely affected.

“However, high volatility of the ringgit can increase uncertainty and hurt economic activities due to the difficulties faced by players in the trade and industry sector in planning their strategy and taking appropriate action.”

Zafrul said the government, through Bank Negara Malaysia (BNM), would always ensure the financial market was well organised and efficient.

BNM, he said, was also committed to introducing measures to ensure sufficient ringgit liquidity, the market’s continued competitiveness and reduced speculative activities.