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Economist: Ringgit may trade at RM4 to US$1 in December

Free Malaysia Today logo Free Malaysia Today 13/9/2017 FMT Reporters

Yeah-Kim-Leng-dollar-ringgit-currency-exchange-1 © Provided by MToday News Sdn Bhd Yeah-Kim-Leng-dollar-ringgit-currency-exchange-1 KUALA LUMPUR: The ringgit is expected to continue to strengthen against the US dollar, with an economist predicting it may even hit RM4 to a US dollar at the end of the year.

The optimism is based on the good growth in trade and the gross domestic product (GDP). The economy achieved a 5.8% growth in April-June.

The Malaysian Reserve quoted Sunway University Business School economics Professor Dr Yeah Kim Leng as saying: “The ringgit has been trading higher these days due to the above-expectations performance of Malaysia’s economy, including the growth in trade and GDP.

“Since we have already reached RM4.19 in early September, I would say that it is possible for the ringgit to reach around RM4.10 to RM4 in December.”

AmBank Research head Anthony Dass told the Malaysian Reserve that looking at the current economic performance, the ringgit could reach an intraday high of around RM4.12 to RM4.15 at the end of the year.

International trade and industry ministry figures show that total trade surpassed the one trillion mark in January-July 2017, with a value of RM1.01 trillion – a 22.7% increase from the corresponding period in 2016.

According to the report, it was the fastest period that trade breached the mark, two months earlier than the normal trend.

Exports increased by 22.3% to RM529.68 billion, while imports rose by 23% to RM478.71 billion, resulting in a trade surplus of RM50.97 billion.

Exports in July 2017 recorded a value of RM78.62 billion, rising by 30.9% compared with a year ago, according to the Malaysian Reserve report.

Exports posted stronger year-on-year growth than imports for the third straight month.

Bank Negara Malaysia has raised its 2017 growth forecast to above 4.8%, from the last forecast in March which predicted growth of 4.3% to 4.8%.

The Malaysian Reserve quoted Dass as saying the optimism over the ringgit was also spurred by the view that the US Federal Reserve would not raise interest rates just yet, as the US dollar was currently weakening following threats from North Korea.

“Previously, we expected the Fed to stick to its forecast of three interest- rate hikes in 2017, which would mean just one more before the year is over.

“However, it is unlikely to happen since the US dollar has been weakening and the central bank also outlined its plans to normalise its US$4.5 trillion (RM18.9 trillion) balance sheet,” he said.

The report noted that since Sept 5, a few days after South Korea warned that North Korea might be preparing to launch another missile into the Pacific Ocean, the ringgit had strengthened against the dollar – reaching RM4.19 last Friday from RM4.26.

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