KUALA LUMPUR — Jan. 5, 2018: It seems like a bull run for the ringgit of late as it has been hitting new highs amid the country’s solid fundamentals, backed by export growth and with expectations high that the local currency will continue to strengthen.
It breached the 4.0 psychologically level versus the US dollar and as at 3 pm today, was traded at a new high of 3.9940/9980 against the greenback, gaining 0.3 per cent.
Sunway University Business School economics professor Dr. Yeah Kim Leng considers the current level as a reflection of the strengthening economy, both globally and domestically.
“Strong growth, as well as better oil prices, underpin the ringgit’s performance,” he told Bernama.
On Wednesday, oil prices traded above US$67 per barrel since 2015.
The Ministry of International Trade and Industry also announced that Malaysia’s exports rose to an all-time high of RM83.50 billion last November, the highest monthly export value after the RM82.62 billion in March.
Yeah said the local note was undervalued for some time, thus the fast pace of the ringgit’s appreciation was a sign of its fundamental adjustment.
Malaysian Association of Technical Analysts president Nik Ihsan Raja Abdullah said that in the mid-term a wave of bullish outlook was anticipated while in the near term, the ringgit would be testing the 3.9000 and 3.8800 against the dollar, riding on an expected interest rate increase from Bank Negara Malaysia.
Malaysia’s economy grew 6.2 per cent in the third quarter of 2017 versus 4.3 per cent in the same period in 2016, while in Q2 the gross domestic product registered a 5.8 per cent growth from 5.6 per cent in Q1.
BNM had said that given the continued strong performance in the quarter, Malaysia’s economy was on course to register close to the upper range of the official projection of 5.2 to 5.7 per cent in 2017, supported by domestic demand.