Malaysian currency sentiment to improve on better outlook

19 May, 2019 12:00 AM printer

KUALA LUMPUR: Malaysia's decent economic growth and wider current account surplus in the first quarter, as well as measures to support market liquidity and accessibility could help strengthen Malaysian ringgit, an analysis said Friday.

Kenanga Research said in a report that it expects the Ringgit strength to restore due to the sharp upswing in Malaysia's current account, decent economic growth and Malaysian central bank's new measures, reports Xinhua.

The current dovish United States Federal Reserves and a relatively higher Brent crude oil price could further provide some support to the Ringgit, it added.

The research house expects the Ringgit to improve slightly to 4.10 against the U.S. dollars this year, from 4.13 last year. However, in the short term, it believed the Ringgit will remain volatile and may test the 4.20 level.

The Ringgit fell slightly to 4.1715 against the U.S. dollars as of 9 a.m. on Friday. According to Malaysian central bank, the Ringgit has appreciated by 1.4 percent against the U.S. dollar in the first quarter, driven mainly by non-resident portfolio inflows. However, since April, the Ringgit has depreciated by 2.2 percent against the U.S. dollar as at May 15, in line with most regional currencies. "The recent depreciation pressure reflected cautious investor sentiments in global financial markets amid the weakening global growth outlook as well as uncertainties surrounding geopolitical and global trade developments," said the central bank.