By Durratul Ain Ahmad Fuad
KUALA LUMPUR, Sept 10 (NNN-Bernama) — The Malaysian ringgit is likely to trade with an upward bias next week against the US dollar as the greenback is retreating in global markets, said an economist.
Juwai IQI global chief economist Shan Saeed said central bank, Bank Negara Malaysia (BNM) has played its card smartly despite pressure from global financial markets.
“The US Federal Reserve (Fed) is making tactical maneuvering to bring the value (of the US dollar) down in order to support the US economy. A 50 to 75 basis points hike is expected at the Sept 20-21 Fed meeting.
“A stronger US dollar is bad for the global economy. A stronger greenback makes imports cheaper for the US economy,” he told Bernama.
The ringgit is expected to trade within the 4.4000-4.4900 range against the US dollar next week.
“The ringgit is going to make a turnaround soon. The year-end forecast stance remains unchanged, from 4.0500 to 4.3500 against the US dollar. The Malaysian economy will grow between 6.5 and 7 per cent in the current fiscal year,” he added.
On Thursday, BNM increased the overnight policy rate (OPR) by 25 basis points to 2.50 per cent at its fifth monetary policy committee (MPC) meeting to reduce inflationary pressures.
For the week just ended, the ringgit was traded mostly lower against the US dollar as traders remained cautious ahead of BNM’s MPC meeting, deepening global economic uncertainty, and rising US treasury yields.
On Sept 7, the ringgit opened at its lowest level versus the US dollar since the Asian financial crisis back in 1998, as more investors shifted to safe havens due to the uncertain global economic outlook.
The ringgit hit 4.5010/5035 during the morning trade on Wednesday.
On Friday, the ringgit weakened against the greenback to 4.4965/4990 compared with 4.4855/4870 a week earlier.
The local note also traded mostly lower against a basket of major currencies.
It decreased against the British pound to 5.2249/2278 from 5.1888/1906, depreciated against the Singapore dollar at 3.2189/2209 from 3.1996/2009, and eased versus the euro to 4.5361/5386 from 4.4873/4888 this week.
However, the local unit surged against the Japanese yen to 3.1670/1690 from 3.1950/1963 a week earlier.
— NNN-BERNAMA