Bank Negara Malaysia in its commentary mentioned that the ringgit has risen strongly against the United States (US) dollar, especially since early July following a clearer interest rate movement by the Federal Reserve (Fed).
BNM Deputy Governor Adnan Zaylani Mohamad Zahid said the narrowing interest rate differential with the US would support portfolio inflows given Malaysia's positive economic outlook.
From a local point of view, the domestic landscape is also quite positive with ongoing reforms of government structures, rationalization of subsidies and increased social protection offering opportunities to pursue meaningful change.
In addition, coordinated actions between the government and BNM that help balance the flow of funds better will continue and this provides strong support for the ringgit.
He further said that continuous structural reforms by the government coupled with improved economic prospects will continue to maintain global interest in investing in Malaysia.
Malaysia places a major focus on sustainability and sets goals and plans to optimize a diverse sukuk structure to fund a smooth transition to a sustainable economy.
In Asia, an estimated $1.7 trillion is needed annually for infrastructure development with a significant gap of $800 billion in climate finance especially in renewable energy.
Meanwhile in Malaysia, sukuk is an important financing instrument in supporting the financing needs of the economy with a total of $56 billion of sukuk issued in 2023 with a major focus on renewable energy and green real estate.
Adnan believes there is a great opportunity to further leverage Asia's strength in sustainable bond issuance through synergy with Malaysia's expertise in Islamic finance.
Malaysia's strong economic fundamentals and the maturity of the Islamic financial ecosystem also position the country as a natural hub for Shariah-compliant investment purposes.
At the regional level, BNM believes that innovative financial solutions including Islamic financial instruments are key to supporting the sustainability agenda of Asean countries.
