By Siti Radziah Hamzah
KUALA LUMPUR, Aug 31 (Bernama) -- The ringgit is expected to trade higher against the US dollar next week on a sustained demand for the local currency.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit is likely to breach its immediate support level of RM4.3030 in the near term.
He also noted that among the economic data to be monitored next week are Bank Negara Malaysia's Monetary Policy Committee Meeting and the US' non-farm payrolls.
"If one were to look at the US dollar/ringgit since the currency peg was removed on July 21, 2005, the average level stood at RM3.7875. Hence, there is a high tendency for ringgit to appreciate further as the ringgit might revert to its long-term mean," he told Bernama.
Meanwhile, AmBank Group said the ringgit could further strengthen moving forward and is unlikely to return last few weeks' gains due to healthy fundamentals as well as in view of the US Federal Reserve's move to start its interest rate cutting cycle.
“This is in tandem with the expectations that Bank Negara Malaysia would maintain its overnight policy rate (OPR) for the rest of 2024 and perhaps into the first half of 2025, thus would narrow the rate differentials between the OPR and the Federal Funds Rate," it said in a note on Friday.
Also, it noted that interest rate cut by the US Federal Reserve without the possibilities of the US economy to slip into recession would bode well for risk appetite and that should bring some allure for emerging market assets including ringgit denominated assets.
“We saw some foreign buying into Malaysian equities up until Aug 29, 2024, pushing the net foreign buying amount to RM2.53 billion on a year-to-date basis. Coupled with Malaysia’s relatively healthy credit sovereign rating, we think portfolio inflows into Malaysia should bode well for the ringgit,” it added.
On a Friday-to-Friday basis, the ringgit strengthened to 4.3185/3225 against the US dollar from 4.3720/3775 a week ago.
The local currency also traded higher against other major currencies.
It gained against the euro, closing at 4.7862/7906 from 4.8604/8665, appreciated against the British pound to 5.6939/6992 versus 5.7391/7463 and gained vis-a-vis the Japanese yen to 2.9754/9784 from 2.9914/9956 a week earlier.
The ringgit traded higher against ASEAN currencies.
It improved vis-a-vis the Singapore dollar to 3.3158/3191 from 3.3410/3454 and went up against the Indonesian rupiah at 279.3/279.8 against 282.1/282.7 previously.
It edged up against the Thai baht to 12.7540/7726 from 12.7575/7810 and increased against the Philippine peso to 7.69/7.70 from 7.75/7.76 a week earlier.
-- BERNAMA
