THE Ringgit has been strengthening against the US Dollar which translates to an improvement in the cost of living as the cost of imported goods will be cheaper, according to an analyst.

Speaking to FocusM, University Utara economist Dr K. Kuperan Visvanathan noted that while a strong Ringgit will be a boon for imports, the cost of exports will end up making Malaysian goods more expensive.

According to Kuperan, there will be a higher inflow on money into the region as becomes more attractive to investors.

“This is due to the US Federal Reserve lowering its key overnight borrowing rate by a half percentage point, or 50 basis points, amid signs that inflation was moderating and the labour market was weakening,” he remarked.

“The local currency had been around RM4.70 to the US Dollar but today stands around RM4.30 which is good news for the economy.”

The lower interest rates in the US is a big help for Malaysia as there will be liquidity as investors turn to Malaysia, Kuperan viewed.

He explained that the higher liquidity because of higher investments will allow the government to look into more projects and other investments that could benefit the country.

He further stated that the political stability and government policies to reduce the reliance on subsidies make the country more attractive to investors.

“One good thing with a stronger Ringgit is the cost of borrowing for the government will be lower and this will help reduce the debt burden while providing options on how to use the extra funds,” the economist added.

Kuperan went on to remind the people not to rejoice too early as the price of goods may fluctuate in response to a stronger Ringgit while the cost of exports will go up.

“On the bright side, prices of imported foods stuff such as onions and wheat could go down thus reducing the cost of living,” he noted, adding that as the economy improves, the higher capital inflows will provide more options to the government on how to help the people. - Sept 19, 2024

https://focusmalaysia.my/stronger-ringgit-better-for-the-country-will-improve-cost-of-living-says-expert/