Ringgit rises to 2018 high buoyed by Trump
Central bank says economic fundamentals and government reforms will provide long-term support to ringgit
[KUALA LUMPUR] The Malaysian ringgit rose to its strongest in nearly eight years amid broad US dollar weakness and signs the central bank may be comfortable with the currency’s level.
The ringgit strengthened as much as 0.9 per cent to 3.9187 per US dollar, the highest since April 2018. It is the best performer in Asia after the South Korean won on Wednesday (Jan 28).
Emerging Asian currencies got a boost as President Donald Trump’s embrace of a weaker US dollar fuelled speculation of a longer-term decline in the greenback. Bank Negara Malaysia governor Abdul Rasheed Ghaffour also said economic fundamentals will provide long-term support to the ringgit, along with ongoing government reforms.
“The ringgit could still strengthen further,” buoyed by a solid domestic economic outlook, said Lloyd Chan, currency strategist at MUFG Bank The ringgit may gain to 3.85 per US dollar by the end of the first quarter amid risk of extended weakness in the greenback, he said.
The ringgit has surged more than 3 per cent this month.
Bank Negara Malaysia does not set or influence the level of the ringgit, Abdul Rasheed said in an interview with state-backed media Bernama on Tuesday. The central bank will maintain orderly market functioning and ensure sufficient liquidity in the market, he said.
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Malaysia’s role in the artificial intelligence supply chain and narrowing interest rate differential are also supporting the ringgit. The central bank this month maintained its policy rate. BLOOMBERG
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