At 9 am(0100gmt) Thursday, the ringgit was quoted at 4.1245/1285 versus the greenback against 4.1210/1260 on Wednesday. The ringgit also traded lower against other major currencies, - Reutersfilepic
KUALA LUMPUR: The ringgit is expected to recover gradually over time as economic fundamentals remain intact and the Malaysian economy is still expected to grow at a steady pace, says RHB Research.
In a note, the research firm said the local currency would also get a boost from the commodities sector’s recovery and when policies by US President Donald Trump’s administration started to disappoint the market.
“Nevertheless, volatility in the ringgit could persist in the near-term given expectations of further US rate hikes, vulnerability from large foreign holdings of fixed income instruments in the country and volatility of oil prices,” it said.
After appreciating by 1.8% for the whole of April, the ringgit rose further by 0.3% to RM4.3365 vis a-vis the US dollar in the first week of May.
RHB Research said the stronger ringgit in April was on account of a weaker greenback, partially due to the disappointing policy implementations by Trump, easing Eurozone disintegration risks and improved foreign inflow of funds into the Malaysian equities market.
Malaysia’s foreign exchange reserves rose by US$700mil to US$96.1bil as at April 28 from US$95.4bil in March due to foreign inflow of funds, driven by Bank Negara Malaysia’s requirement to convert 75% of export proceeds into ringgit, and the central bank’s efforts at managing other foreign capital outflows. - Bernama
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