Shankar Chelliah, an associate professor at Universiti Sains Malaysia, said the decision was a counterweight against the global economic uncertainties in 2017 that might increase pressure on the ringgit.

Petronas announced yesterday that it had decided to cut production by up to 20,000 barrels per day in 2017, in line with an agreement between Opec (the Organisation of Petroleum Exporting Countries) and non-Opec countries.

Chelliah praised Petronas for the decision, saying its contribution to the effort to raise global oil prices would benefit the ringgit.

“If one oil-producing country decides to go against the flow, it will be very difficult for the other oil-producing countries,” he said.

“Next year, there’ll be a lot of uncertainties. A reduction in the oil supply will cause prices to go up. It will benefit a lot of oil-producing countries.”

One of the uncertainties, he said, was whether the United States Federal Reserve would raise interest rates. If it decided to do so, he added, a lot of US companies operating overseas would go back to home soil to enjoy higher returns.

There were uncertainties in Europe too, he said. Next year, Germany and France will be holding general elections and Britain will take steps to leave the European Union.

Chelliah noted that both the US and Europe were major markets for Malaysian products.

He said Petronas’ decision was spot-on in the light of these uncertainties.