Ringgit likely to hit RM3.55 to US dollar

Fitch Solutions says the ringgit will draw strength from the sustained current account surplus next year.

PETALING JAYA: BMI has a bullish view on the ringgit which it forecast to strengthen further as interest-rate differential between the United States and Malaysia narrows with further rate cuts by the US Federal Reserve (Fed) in 2024 and 2025.

The political risk assessments and market analysis advisory expects the local unit to appreciate and hit RM3.55 against the greenback by end-2025, helped by resilient inflow of portfolio funds and the narrowing yield differentials, which will benefit the local unit.BMI expects the yield differential to narrow further in 2024 with the expectation the Fed will cut rates by an additional 75 basis points (bps) in the fourth quarter of 2024, after cutting by 50 bps last week, and on the assumption Bank Negara leaves its overnight policy rate on hold at 3% through end-2024.