Ringgit depreciation partly influenced by sentiments - Nazir Razak

The CIMB Group chairman said the bank's economists value the ringgit at about 3.7 to a US dollar.

"CIMB economists say the ringgit exchange rate has to be around RM3.70 (compared to the American dollar).

"If our economists are right, this means the ringgit is valued at a lower rate of around 10 percent, which may be caused by sentiments," he said.

Nazir said negative comments and speculations on domestic issues would not help in increasing the value of the ringgit.

"In Malaysia, we have investors from all over the world as we have an open market and economy. Upon hearing Malaysia's current political situation, many of these investors question why they have to be involved, so they move on to other countries. These causes an outflow of capital which leads to a faster depreciation of the ringgit," he said.

He said the current value of the ringgit is largely influenced by the present global economic challenges which include fuel price and the revision of the yuan.

Nazir added that the government's action to understand the current economic situation through discussions with analysts and traders is seen as a positive move.