CYBERJAYA (Aug 6): The strengthening of the ringgit reflects the fundamentals of the country’s economy and policies, said Investment, Trade and Industry Minister Tengku Datuk Seri Zafrul Abdul Aziz on Tuesday.

He noted that despite tough policy implementation decisions, confidence has grown among both foreign and local investors.

“We look at the capital market and stock market, showing that investors are confident about the prospects of Malaysia. Additionally, the first quarter gross domestic product (GDP) growth and the second quarter advanced estimate of about 5.8% - all these are the basis of the ringgit strengthening,” he said when asked about the ringgit’s performance.

He was speaking to reporters after the groundbreaking ceremony of Vantage Data Centers’ second campus here. Also present was Digital Minister Gobind Singh Deo.

At 8am on Tuesday, the ringgit traded slightly higher at 4.4200/4300 against the US dollar, compared to Monday’s close of 4.4240/4305.

Economists noted that the ringgit has made impressive gains this year, appreciating 4.1% against the US dollar.

Tengku Zafrul also expressed optimism about achieving this year’s GDP growth target of 4% to 5%, crediting the government’s persistent efforts.

“We have seen trade increase by 8.4% in the first six months of this year, with investments up by 13%. If we can sustain these (trends), we should be able to meet our GDP growth target of 4% to 5% this year,” he said.

However, he acknowledged that the ringgit’s gains are partly due to a weakening US dollar, following a weak employment report and the prospect of US rate cuts. 

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