KUALA LUMPUR, Aug 19 – The ringgit will likely trade higher against the US dollar between 4.2700 and 4.2800 next week on improved sentiment towards the local unit, a dealer said. The dealer said the sentiment would be fuelled by a recovery in global oil prices, better-than-expected second quarter of 2017 (2Q17) gross domestic product (GDP) growth of 5.8%, as well as higher current account surplus.
On Friday, Bank Negara Malaysia (BNM) announced that Malaysia’s economy grew 5.8% in the 2Q17 compared with four per cent in the same quarter last year. The central bank also said that the balance of payment showed a surplus of RM9.6 billion in current account compared with RM5.3 billion in the previous quarter, mainly contributed by higher surplus in goods accounts of RM27 billion.
In a statement today, BNM said the ringgit and most regional currencies appreciated against the US dollar during 2Q17, driven mainly by continued weakness in the US dollar due to Trump’s administration’s policy uncertainties.The central bank said the ringgit, however, appreciated the most during the quarter amid non-resident inflows into Malaysia’s financial markets.
It also said that this was driven by encouraging domestic macro-economic conditions, which included the strong GDP growth and exports performance. It said the positive ringgit sentiment was also supported by further liberalisation of the bond market and foreign exchange hedging requirements announced by the Financial Markets Committee.
“Going forward, the ringgit will continue to be driven by a confluence of external and domestic factors which include the timing and pace of monetary policy normalisation by major central banks, global political development and domestic economic performance,” it said. On a Friday-to-Friday basis, the ringgit was traded higher at 4.2880/2910 against the US dollar from 4.2935/2965 in the previous week.
The local note was traded higher against other major currencies. It improved versus the Singapore dollar to 3.1423/1457 from 3.1461/1495, rose against the British pound to 5.5247/5302 from 5.5644/5696, appreciated against the euro to 5.0311/0363 from 5.0479/0518, and increased against the yen to 3.9285/9324 from 3.9365/9396 last Friday. — Bernama