StanChart sees Malaysian economy growing 3.8% in 2017

World Bank's outlook reflected a gradual slowdown in the growth of consumer spending and investment

KUALA LUMPUR: Standard Chartered PLC Research, which sees the Malaysian economy growing at 3.8% on-year in 2017, expects ringgit volatility to continue into the first-half of the year.

The bank's Asean and South Asia forex strategist Divya Devesh said in a media briefing that liquidity remains an issue for the forex market.

He expects the ringgit to weaken to 4.60 to the US dollar by end-June before strengthening to 4.30 early next year.

"Market liquidity has deteriorated quite significantly," Divya noted, adding that the ringgit has also become disconnected  from fundamentals.

He said that the monthly onshore spot trading has fallen to RM60bil frm RM120bil.

Divya also said that another drag on liquidity was the reluctance of exporters to convert their US dollars to ringgit.

He said this has made the forex market "extremely  one sided".

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