Ringgit likely to improve to 4.40 against US dollar next week

 |Jan 14, 2017

Ringgit

The ringgit is likely to improve to 4.40 level against the US dollar next week as sentiment towards the local note has started to improved, a dealer said.

Affin Hwang Investment Bank Vice-President/Head of Retail Research Nazri Khan Adam Khan said Malaysia’s strong economic fundamentals and the higher crude oil and commodity prices would continue to support the ringgit.

“Better trade data from China in terms of higher imports can potentially translate into better exports for Malaysia, thus boosting the ringgit recovery,” said Nazri Khan to Bernama.

Bank Negara Malaysia’s (BNM) Governor Datuk Muhammad Ibrahim said on Friday the measures taken by the central bank and the Financial Market Committee last December to stabilise the ringgit were expected to show their full impact by mid-2017.

“Among the measures taken were to allow exporters to retain only up to 25 per cent of export proceeds in foreign currency and the rest in ringgit.

“Other measures include allowing residents, including resident fund managers, to freely and actively hedge their US dollar and Chinese renminbi with an exposure of up to a limit of RM6 million per client per bank,” said Muhammad.

He also said BNM would introduce new measures to further strengthen the local note, if necessary.

For the week just-ended, the ringgit was traded higher at 4.4600/4640 against the greenback compared with last Friday’s 4.4710/4740.

It rose against the British pound to 5.4439/4497 from 5.5373/5428 previously.

The local note, however, ended mostly lower against other major currencies.

The ringgit fell against the Singapore dollar to 3.1243/1282 from 3.1176/1213 last Friday and against the yen it eased to 3.8898/8949 from 3.8550/8586 last week.

Against the euro, the local note depreciated to 4.7468/7524 from 4.7388/7438 last Friday.

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