KUALA LUMPUR, Nov 13 — The ringgit appreciated by 2.9 per cent against the US dollar in the third quarter (Q3) of 2020 following continued non-resident portfolio inflows, said Bank Negara Malaysia (BNM).
The central bank said this was driven by positive investor sentiments following signs of recovery in global economic activity as countries eased movement restrictions and progressively restarted their economies.
“Improvements in investor risk appetite were also supported by the changes in the US Federal Reserve’s monetary policy framework, which suggests that US monetary policy could remain accommodative for a longer period,” it said in a statement today.
BNM said the ringgit’s development was in line with most regional currencies, which appreciated against the US dollar during the quarter.
“In the more recent period beyond Q3, despite the recent resurgence in Covid-19 cases across some advanced and emerging market economies, China’s steady economic recovery and the International Monetary Fund’s (IMF) upward revision to its projection for global growth for 2020 continued to support investor sentiments.
“As a result, Malaysia experienced non-resident portfolio inflows and the ringgit appreciated by 0.6 per cent against the US dollar since end-September 2020 (as at November 12),” the central bank said.
However, BNM said, the global environment remained highly uncertain in the near term, which may lead to periods of heightened capital flows and exchange rate volatility going forward.
Meanwhile, Malaysia’s net financing to the private sector continued to expand by 4.6 per cent on an annual basis.
BNM said outstanding loan growth increased during Q3, supported mainly by household loans with broad-based improvements in loan demand.
In addition, outstanding business loans registered modest growth due to slower loans disbursed for working capital purposes, it said.
“Loan disbursement levels also recovered, with disbursements to households exceeding its historical levels,” it added.
— Bernama
