Malaysian Ringgit Is Undervalued - Central Bank

(RTTNews) - Malaysia's currency ringgit is undervalued and should be trading higher given the economic fundamentals, the country's central bank said Tuesday as it tries to prop up the currency that is trading near 26-year lows. "The ringgit ought to be traded higher," Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said citing the country's economic fundamentals and prospects, reports said.

The BNM had sought to reassure markets last week after the Malaysian currency sunk to a 26-year low of 4.880 against the U.S. dollar. The bank had cited the positive economic fundamentals and put the blame for the weakening on external factors.

The South Asian currency has weakened nearly 4 percent thus far this year. The central bank has taken steps to engage with the government-linked investment institutions, government-linked enterprises, corporations and investors to boost continuous inflows to the foreign exchange market, the central bank chief said.

Prime Minister Anwar Ibrahim on Friday expressed concern over the weakening of the ringgit to its lowest level since the Asian Financial Crisis.

The ringgit should be "under control", the premier said as he cited the strong economic fundamentals. He also blamed external factors for the currency's weakening.

The ringgit was trading around 4.777 against the dollar on Tuesday.