By Nurul Jannah Kamaruddin<\/p>\n\n\n\n
KUALA LUMPUR, March 31 (NNN-Bernama) — Economists are projecting a better outlook for Malaysian ringgit in the second quarter (Q2) of 2023\u00a0amid the country’s\u00a0relatively resilient economic outlook.<\/p>\n\n\n\n
The economy\u2019s continuous growth momentum will in turn support investor confidence and attract inflows of foreign capital, said Kenanga Investment Bank Bhd.<\/p>\n\n\n\n
The investment bank also did not see any apparent risk from the upcoming state elections.<\/p>\n\n\n\n
\u201cThe weakening of the US dollar due to the recalibration of market expectations for a more dovish Federal Reserve, coupled with Malaysia’s stable political environment and a more resilient economic outlook, may help to support the local note to trade stronger below the 4.40 level by the end of Q2,\u201d it said in its Economic Viewpoint.<\/p>\n\n\n\n
At this current juncture, it is retaining Q2 and end-2023 forecasts at 4.35 and 4.11 respectively.<\/p>\n\n\n\n
However, rising tensions between the United States and China and the ongoing Russia-Ukraine conflict are some of the risks that could pose headwinds to the ringgit. <\/p>\n\n\n\n
\u201cTo note, the current banking turmoil in the US and Europe has yet to result in a sharp increase in risk aversion, as evidenced by the Chicago Board Options Exchange\u2019s Volatility Index.<\/p>\n\n\n\n
\u201cDespite concerns about potential risks, some investors are still investing in risk-on assets, particularly in emerging markets. This may be attributed to the promising long-term growth potential of emerging markets that outweigh the short-term risks,\u201d it added.<\/p>\n\n\n\n
Nevertheless, Kenangan Investment Bank said it is important to keep in mind that the situation remains dynamic, with the ongoing regional banking crisis in the US posing a possible threat of another round of financial turbulence.<\/p>\n\n\n\n
Meanwhile, Bank Muamalat Malaysia Bhd chief economist and social finance Dr Mohd Afzanizam Abdul Rashid told Bernama that a domestic rate hike could help to drive the ringgit’s strength in Q2.<\/p>\n\n\n\n
He also believes a 4.35 range is achievable by end of the quarter.<\/p>\n\n\n\n
The ringgit last hit the level in February, with 4.52, hit on March 8, being the weakest rate for the year so far.<\/p>\n\n\n\n
At present, he said the Fed seems to be more guarded in its monetary tightening cycle.<\/p>\n\n\n\n
Mohd Afzanizam said the Fed may deliver another 25 basis points hike in May, increasing the terminal rate for the Fed Fund Rate (FFR) to 5.25 per cent and would stop there for a while.<\/p>\n\n\n\n
He said incoming data would be crucial to shaping the Federal Open Market Committee (FOMC) members’ future view.<\/p>\n\n\n\n
\u201cWe believe the US economy would start to moderate further in Q2 as the effect of past interest rate hikes, totalling 475 basis points since early last year would have started to make an impact on the economy.<\/p>\n\n\n\n
\u201cWhen borrowing costs are high, businesses would tend to be mindful in their capital expenditure decision as the hurdle rate or internal rate of return, which is the common tool for performing due diligence, has become stricter.<\/p>\n\n\n\n
\u201cSimilarly, households would be taken aback when rates are high. This will impede them from purchasing big-ticket items. Such dynamics would have a repercussion on other sectors namely real estate, banks, professionals and building materials to name a few,\u201d he noted.<\/p>\n\n\n\n
— NNN-BERNAMA\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"
By Nurul Jannah Kamaruddin KUALA LUMPUR, March 31 (NNN-Bernama) — Economists are projecting a better outlook for Malaysian ringgit in the second quarter (Q2) of 2023\u00a0amid the country’s\u00a0relatively resilient economic outlook. The economy\u2019s continuous growth momentum will in turn support investor confidence and attract inflows of foreign capital, said Kenanga Investment Bank Bhd. The investment […]<\/p>\n","protected":false},"author":30,"featured_media":216467,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[215,288,300,318],"tags":[],"_links":{"self":[{"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=\/wp\/v2\/posts\/216789"}],"collection":[{"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=\/wp\/v2\/users\/30"}],"replies":[{"embeddable":true,"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=216789"}],"version-history":[{"count":1,"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=\/wp\/v2\/posts\/216789\/revisions"}],"predecessor-version":[{"id":216792,"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=\/wp\/v2\/posts\/216789\/revisions\/216792"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=\/wp\/v2\/media\/216467"}],"wp:attachment":[{"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=216789"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=216789"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/namnewsnetwork.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=216789"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}