(Malaysia Insider) TOKYO, May 23 — Prime Minister Datuk Seri Abdullah Ahmad Badawi today refuted a report by the US Treasury that the ringgit is undervalued, saying the local currency reflects its true value and that of the economy and neither is it contributing to imbalances in the currency market.
Abdullah said that since the ringgit's peg against the US dollar of 3.8 was removed on July 21, 2005, it has appreciated gradually in tandem with economic growth and expanding trade minus any currency volatility.
The ringgit, which traded at 3.2080 versus the dollar today from 3.2090 yesterday, has appreciated by about 18.2 per cent versus the greenback since it was unpegged about three years ago.
"We do not intervene to make the ringgit go up or down; it has established a value which we believe to be realistic," he said during a press conference with the Japanese media.
"There has been no serious fluctuation or volatility, everyone knows that."
The Treasury report issued before last Friday's market opened said "a persistently large current account surplus coupled with still-low domestic investment" are fundamental evidence that the ringgit is undervalued.
It led to a slight appreciation of the ringgit to 3.24 from 3.27 but since then the ringgit has advanced further.
Abdullah said that everyone, including economists, is free to express their opinion about currencies including the ringgit. — Bernama
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