From worst to among strongest: Ringgit’s remarkable turnaround

KUALA LUMPUR: UOB Malaysia economist Julia Goh said the Ringgit has turned around from being among the worst performing currencies to be one of strongest performers against the US dollar.

The recent Ringgit rally was helped by funds repatriated from abroad and Bank Negara reducing the statutory reserve requirement ratio to 3.5 per cent.

“We expect the Ringgit to continue to be supported by the country’s diversified export base, sustained current account surplus and the government’s ability to manage fiscal risks from weaker oil prices,” Goh said.

“China’s stabling of the Renminbi and USA Federal Reserve’s more gradual interest rate hike cycle will continue to support the Ringgit’s firm footing in 2016,” she added.

Given that the USA Federal Reserve’s fewer interest rate hikes this year and the recent Ringgit strengthening, Goh expects the Ringgit to trade around RM4.25 to US $1.00 by mid-2016 from today’s trade of RM4.17.

By year end, she estimated the Ringgit could strengthen to RM4.05 to US$1.00.

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