Business

Ringgit’s movement driven by external forces

Senior Economist Rafael Munoz Moreno

Syndicated News
Written by Syndicated News

KUALA LUMPUR, Jan 16 2017 :The ringgit’s movement will likely be driven by external developments and global perspectives, says the World Bank.

Senior Economist Rafael Munoz Moreno said one factor likely to move the local currency was changes in the United States’ fiscal policy and the level of transparency in their monetary policy.

“This will translate into the (performance of) global financial markets (including the Malaysian market),” he told reporters at a two-day World Bank conference on ‘Enhancing the Quality of Service Delivery’, here today.

He maintained that Malaysia’s currency was still strong as the country was financially integrated compared with other countries within the region.

A financial integration refers to a process whereby a country’s financial market becomes more closely integrated with those in other countries, sharing among others, the best financial practices, cutting edge technologies and newly
engineered financial products.

Munoz pointed out that the ringgit’s movement, going forward, would also reflect commodity prices.

“Being a major commodity producing country, any increase in commodity prices will favour the ringgit,” he said.

Recently, the World Bank made a forecast that the Malaysian economy would grow by 4.3 per cent this year and expand further by 4.5 per cent in 2018 as adjustments to lower energy prices ease and commodity prices stabilise.

This signals a moderate expansion from a low of 4.2 per cent, expected in 2016, said the World Bank, adding that growth among commodity exporting economies in the region were forecast to accelerate.

Besides Malaysia, neighbouring Indonesia, which is also a commodity producing country, was expected to see its economy picking up by 5.3 per cent this year from 5.1 per cent last year. – Bernama

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News sourced from Bernama, Reuters, AFP and other accredited news agencies, including credible blogsites and news portals.