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Malaysia: stronger ringgit not a problem for exporters

By: | at 08:00 PM | International Trade  

Malaysia’s forecast for double-digit growth in exports this year remains on track despite a stronger ringgit and the crisis in the euro zone, International Trade Minister Mustapa Mohamed said.

“It is not going to have a big impact. We don’t think it is going to create problems for our exporters,” Mustapa told a luncheon talk in Singapore.

The ringgit has been the strongest performing emerging Asian currency against the U.S. dollar so far this year gaining more than 7 percent on the country’s strong growth prospects, the outlook for higher interest rates and the currency’s status as a proxy to the Chinese yuan.

Mustapa said global fallout from the debt crisis in Europe was not going to be pervasive and the economic recovery in Asia would help Malaysia’s exports.

“It is not going to have a big impact on Malaysia because of the booming (economies) in Asia and ASEAN. Our forecast of double-digit of trade growth in 2010 is stll on track.”

Malaysia’s central bank, which projects a 11.2 percent rise in gross exports for 2010, hiked its key rate by 25 basis points to 2.5 percent on Thursday, in line with market expectations as it slowly unwinds emergency measures implemented during the global downturn.

The rate increase came as the central bank announced that first-quarter economic growth had surged 10.1 percent from a year earlier.

Mustapa also said Malaysia was in talks with a number of countries, including Chile, Turkey and Australia on potential free trade agreements, and added it hoped to sign a pact with India by the end of this year.

“We have been directed that by the time Prime Minister Manmohan Singh comes to KL, the highlight of the visit is to witness the signing of the agreement bebtween Malaysia and India,” Mustapa said. (Reuters)