CURRENT RINGGIT LEVEL REFLECTS IMPROVEMENT IN ECONOMY, SAYS BANK GOVERNOR

KUALA LUMPUR, April 27 (Bernama) -- The stronger ringgit reflects the
improvement in the country's economic conditions and should not be a cause for
concern, Bank Negara Malaysia (central bank) Governor Dr Zeti Akhtar Aziz, said
Tuesday.

She said the ringgit had weakened substantially in 2009 but started
to strengthen in the fourth quarter of last year and in the first quarter of
2010.

"We are seeing levels witnessed before. It had previously strengthened to a
stronger level than what we are seeing today.

"Therefore, we are not concerned. We would be concerned, however, if
there was excessive movement within a short period of time with disorderly
market conditions or if there is a misalignment to the economic conditions,"
Zeti said.

She said the market now remained orderly and the currency was reflecting
its conditions and the economy's underlying fundamentals.

"Of course this is important as far as business, both onshore and offshore
is concerned," she added.

The ringgit, now hovering at 3.18 to the US dollar, has appreciated by about
16.2 per cent since it was de-pegged from the 3.80 level against the greenback
in July 2005 and replaced with a managed float system.

The direction of the ringgit is also expected to be influenced by a decision
on interest rates at the next Monetary Policy Committee meeting on May 13.

"We will make an assessment then on further normalisation of the interest
rate," Zeti said, adding, the meeting would be conducted over two days.

"The first day of the meeting is for the presentation of all information
needed for an assessment and the decision will be deliberated on May 13," she
explained.

On the issue of the Greece sovereign debt crisis, Zeti said the Central Bank
is not concerned, as it did not see any contagion effect.

She expected the aid package to be announced, to contribute to its
resolution.

The European Union (EU) is also split over an economic bailout plan for
Greece. Germany is also insisting on tougher austerity measures by Greece.

News that Germany will prevent the early release of bailout funds for Greece
put Greek government bonds and the euro under pressure on Monday.

-- BERNAMA



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