Advertisement
Malaysia
This Week in AsiaEconomics

Malaysia ringgit poised for strong rebound to 4.5 versus US dollar by year-end, minister Amir says

  • Second Finance Minister Amir Hamzah Azizan’s forecast comes on the back of Malaysia’s stronger economic outlook and benign inflation
  • The ringgit recovered slightly to 4.76 against the US dollar on Thursday after it fell to a 26-year low of 4.8 last week

Reading Time:3 minutes
Why you can trust SCMP
4
Malaysia is expecting its currency, the ringgit, to strenghten against the US dollar. Photo: Shutterstock
Hadi Azmi
The Malaysian government expects the ringgit to rebound to 4.50 against the US dollar by the year-end, buoyed by optimism over the country’s robust economic indicators amid sustained pressure on the currency after it slid to a 26-year-low last week.
Advertisement

The ringgit traded at 4.76 to the US dollar on Thursday afternoon, rebounding slightly from 4.8 on February 20 – its worst performance since the 1998 Asian Financial Crisis.

In response to questions in parliament on Wednesday about whether the currency might slide further, Second Finance Minister Amir Hamzah Azizan said that the country’s “economic growth forecast of four to five per cent this year is expected to facilitate the ringgit’s recovery against the US dollar to 4.50 ringgit”.

Amir’s positive growth outlook is based on Malaysia’s inflation rate being the lowest in Asia currently at 1.6 per cent, falling unemployment, a recovery in exports and record-high investments from foreign and local businesses.
Advertisement

“Market analysts have estimated the ringgit to be undervalued by between eight and 10 per cent”, Amir said, noting the local currency’s current slide has largely been driven by the strengthening of the US dollar and the uncertainty of China’s economic growth, which has also dragged down other Asian currencies.

Advertisement