'Zeti says ringgit significantly undervalued amid growth'

KUWAIT CITY: The Malaysian ringgit remains "significantly undervalued" and risks to economic expansion are unlikely to materialize with exports still strong, Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said. The ringgit doesn’t reflect fundamentals with the nation’s current account in surplus, unemployment at about 3 percent and inflation within Malaysia’s long-term average, Zeti said in an interview in Kuwait City on Wednesday. The currency may recover when the U.S. Federal Reserve normalizes interest rates and as "domestic issues" in Malaysia are resolved, she said. Malaysian policy makers have been struggling to boost confidence in its economy and finances since oil prices started to fall last year and as allegations of financial irregularities at a state investment company hurt sentiment. While the ringgit recovered alongside emerging market currencies in October, it’s still down about 20 percent this year, the worst performer in the Asia Pacific region. "Our export growth remains fairly strong, it has not moderated to the extent that we expected," Zeti said. Malaysian exports and industrial production beat economists’ estimates in September. On expectations of a Fed rate increase, “investors have already anticipated this and have already priced it in, so we have already seen, we believe, most of the outflows," she said. -- Bloomberg