MALAYSIA: The Malaysian National News Agency, Bernama, quoted an analyst on Monday (Aug 12) as saying that due to resilient sentiment ahead of the release of gross domestic product (GDP) data for the second quarter of the year this week, the ringgit continued to open on a better note.
At 8:00 on Monday morning, the ringgit climbed 30 percentage points versus the US dollar to MYR1 = US$ 4.4170/4290. On Friday, it had been at MYR1 = US$ 4.4200/4280.
The currency also held strong against the Singapore dollar. It was up against the Singapore dollar to 3.3348/3442 from 3.3381/3444 on Friday.
Dr Mohd Afzanizam Abdul Rashid, the chief economist at Bank Muamalat Malaysia Bhd, told Bernama he believes the second quarter GDP data, which will be announced on Friday, will not differ much from the advance estimates of 5.8 per cent growth.
“The United States (US) consumer price index (CPI) for July is due on Wednesday, the producer price index (PPI) on Tuesday, with the disinflationary trend to be maintained,” he said.
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And since GDP data for Japan will also be released on Thursday this week (Aug 15), he added that all eyes will also be on the Bank of Japan’s monetary policy stance.
Mr Mohd expects the ringgit to stay close to its current rate against the US dollar. The currency has also performed well recently versus the euro, British pound, and Indonesian rupiah.
On Wednesday last week (Aug 7), the ringgit hit an 18-month high after having been in a downward trend for over a year. In May 2023, the currency reached a 26-year low of US$1 to RM4.78.
Last week, however, it had climbed back to US$1 to RM4.42 as Malaysia’s economic performance saw an improvement.
On Aug 2, the ringgit rose 1.6 per cent against the US dollar. This marked its tenth consecutive day of gains, in its longest run in over two decades, a reversal of three years of the currency’s decline.
In large part thanks to efforts from the government of Malaysia, foreign investors have poured US$112 million into Malaysian stocks so far this year.
The country’s gross domestic product (GDP) estimated growth of 5.8 per cent year-on-year for the April to June period showed acceleration from the previous quarter.
Nevertheless, potential challenges to Malaysia’s economic growth, including lower crude oil prices, remain. /TISG
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