KUALA LUMPUR, Jan 16 — The ringgit maintained its strength against the US dollar after lower US inflation data led to expectations that the US Federal Reserve (Fed) would scale back a 25-basis point interest rate hike, prompting Malaysian exporters to reduce greenback holdings.
At 6pm, the ringgit appreciated to 4.3150/3200 against the greenback from last Friday’s close of 4.3325/3375.
SPI Asset Management managing partner Stephen Innes told Bernama that there is an internal Malaysia dynamics at play, which is presently forcing the ringgit to move stronger.
“Foreign currency deposits in the system have declined at present from 16 per cent in 2022 (2019: 4.0 per cent), driven by favourable US dollar against the local note interest differentials, a strong US dollar as safe haven, and high domestic political risk premium,” he said.
Innes also stated that exporters believe the US dollar has reached its peak and expect the ringgit to climb to below the 4.20 level against the greenback in 2023.
Meanwhile, the ringgit traded higher against a basket of major currencies.
The local unit rose to 5.2643/2704 against the British pound from 5.2973/3035 at Friday’s close.
The ringgit was better against the Singapore dollar at 3.2677/2720 from 3.2782/2825, strengthened versus the euro to 4.6693/6747 from 4.6986/7040, and appreciated vis-a-vis the Japanese yen to 3.3616/3658 from 3.3703/3744 at Friday’s close.
— Bernama
