KUALA LUMPUR – The ringgit is expected to notch a 9% rebound by year end and the currency’s current position is not a risk to the sovereign rating, said S&P Global Ratings.
“We do not see the depreciating ringgit as a risk to the sovereign rating,” YeeFarn Phua, sovereign analyst at S&P in Singapore, told Bloomberg.
“Malaysia’s external position remains strong, augmented by adequate foreign reserves and consistent current-account surpluses.”
Phua added that the ringgit, which traded at 4.79 per US dollar this morning, is expected to climb to 4.40 by year end, and 4.30 by end-2025.
The slide of the ringgit is mostly attributed to China’s sluggish economy, which has hurt Malaysian exports.
S&P also reiterated the safety of the nation’s credit rating despite the currency dip, as almost all of Malaysia’s debt is denominated in the ringgit.
The rating agency estimated Malaysia’s foreign debt stood at RM30 billion (US$6.26 billion) at the end of 2023, under 3% of the total.
S&P has rated Malaysia an A- since 2003, which is the highest among peers in developing Southeast Asia. – February 22, 2024