KUALA LUMPUR, May 13 — The ringgit is expected to trade range bound against the greenback next week due to the US debt ceiling uncertainty that could help strengthen the greenback, an analyst said.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid believes the ringgit will be trading around 4.4600 to 4.4700 as the resistance level is currently located at 4.4872.
He told Bernama the US dollar may benefit from its safe-haven status as the debt ceiling issue gives the impression that the risk of a default by the US government has risen. Investors tend to go for safe-haven assets such as the US dollar in times of economic or financial trouble.
During the week just ended, Bank Negara Malaysia (BNM) announced Malaysia’s economy recorded an expansion of 5.6 per cent in the first quarter of 2023 (1Q 2023), driven mainly by private sector expenditure.
Governor Tan Sri Nor Shamsiah Mohd Yunus said the growth in 2023 was supported by further expansion of household spending, continued investment activity, improving labour market and higher tourism activities.
Mohd Afzanizam noted that the better-than-expected first-quarter gross domestic product (GDP) data showed that the economy has been growing at a decent rate.
“To a large degree, such a trajectory was in line with the recent overnight policy rate (OPR) hike as the economy has normalised and BNM now has more policy space to respond to future shocks.
“From a confidence-building point of view, that was positive,” he added.
On a Friday-to-Friday basis, the ringgit traded lower against the US dollar at 4.4765/4835 compared to 4.4350/4400 a week earlier.
Meanwhile, the local note traded mostly lower against a basket of major currencies compared to a week earlier except for the euro, where it rose to 4.8839/8915 from 4.8900/8955 last week.
The ringgit weakened against the British pound to 5.6082/6169 from 5.5908/5971 a week earlier and went down vis-à-vis the Japanese yen to 3.3233/3290 from 3.3050/3090 previously.
The ringgit traded mostly lower against its Asean counterparts.
It slipped against the Thai baht to 13.1658/1922 from 13.1446/1661 and was lower versus the Singapore dollar at 3.3552/3609 from 3.3464/3507 the previous week.
The local note depreciated against the Indonesian rupiah to 303.4/304.1 from 302.1/302.6 last week and was flat vis-à-vis the Philippine peso at 8.02/8.04 versus 8.02/8.03 previously.
— Bernama
