Kuala Lumpur: According to one dealer, the ringgit will continue to be supported next week on improved domestic economic sentiment due to China’s continued economic reopening story and the decision to keep the overnight policy rate (OPR) at 2.75%.
Steven Innes, Managing Director of SPI Asset Management, said China is the largest export market for most regional economies and that positive news from the mainland will significantly improve trade prospects.
“We expect the US dollar-ringgit exchange rate to be between 4.2650 and 4.2950 next week, raising the currency rate year-end call to the 4.10 level from our current forecast of 4.20.
“Depending on post-pandemic Chinese consumption and post-Chinese New Year property market developments, we may revise upwards to the 4.00 level,” he told Bernama.
He stressed that Malaysia would be a big beneficiary as most of Malaysia’s exports would end up in China, which would no doubt support the local currency.
On the domestic front, Innes believes the ringgit will be higher as the political risk premium embedded in the currency since 2018 is now evaporating and Malaysian exporters are reducing their dollar holdings. increase.
Exporters could devalue the U.S. dollar next week after Philadelphia Federal Reserve Governor Patrick Harker issued a statement telling the U.S. Central Bank to slow the pace of interest rate increases. Stated.
The ringgit ended the week mostly higher as market sentiment improved due to domestic and global factors.
On a weekly basis, the ringgit rose against the US dollar at 4.2830/2875 on Friday, up from 4.3325/3375 the previous week.
Local notes are also stronger than they were a week ago against a basket of major currencies.
against the British Pound from 5.2973/3035 to 5.2861/2916; the Euro from 4.6986/7040 to 4.6393/6442; the Japanese Yen from 3.3703/3744 to 3.3073/3111; Increased to 2425. . – Bernama