Ringgit nears recovery as state firms boost support
KUALA LUMPUR, July 31 — The Malaysian ringgit is gaining momentum, driven by robust growth and anticipated Federal Reserve rate cuts.
Having hit a 26-year low in February, the ringgit is now nearly back to its previous levels, a report by Bloomberg said today.
Predictions suggest it could reach 4.60 per dollar by mid-2025, as forecasted by Oversea-Chinese Banking Corp, the report was quoted as saying.
Early on Wednesday, the ringgit was up 0.2 per cent against the US dollar.
The report cited that the ringgit’s increase is bolstered by Bank Negara Malaysia’s initiatives to persuade state-affiliated companies to repatriate and convert foreign earnings, along with utilising forwards to stabilise the currency.
Additionally, the resurgence in the global tech cycle is contributing to the recovery of exports, the report was quoted as saying.
“We look for the ringgit to recover some lost ground when yield differential dynamics further improve as the Fed gets closer to embarking on a rate cut,” Christopher Wong, a foreign exchange strategist at OCBC was quoted as saying.
Additional factors such as foreign investments, semiconductor market recovery, and a potential rebound in China’s economy further bolster the ringgit.
Expected rate cuts by the Fed will make the ringgit more appealing to dollar investors.
Malay Mail
