KUALA LUMPUR (Sept 29): The ringgit weakened to a fresh level at 4.4765 against the US dollar after Bank Negara Malaysia Governor Tan Sri Dr Zeti Akhtar Aziz said the central bank was not compelled to raise interest rates.

At 11.03am, the ringgit pared losses at 4.4760. The ringgit had traded at current levels against the US dollar from its strongest point at 3.2330 over the past one year.

Yesterday, Zeti said that the central bank was not facing any pressure to increase interest rates despite the weakening ringgit.

The Edge Financial Daily quoted her as describing the current interest rate as being “accommodative”.

“It (the current interest rate) is supporting economic activities and we are seeing steady growth of credit, and it has not hampered borrowings from the financial system,” the governor told reporters after the launch of the Financial LATeracy exhibition at Bank Negara Malaysia Museum and Art Gallery.

Bank Negara had maintained the overnight policy rate (OPR) at 3.25% following its latest monetary policy committee meeting on Sept 11 this year.

The OPR is still higher than Malaysia’s latest reported inflation. According to the Statistics Department, domestic inflation, as measured by the consumer price index (CPI), rose 3.1% in August from a year earlier.

CPI grew mainly on costlier liquor and tobacco products, according to the department.