Connect with us

Hi, what are you looking for?


Ringgit seen to weather storm from Fed taper

CURRENCY TRADERS are gearing up for an action-packed week as the Federal Reserve moves toward tapering its debt purchases. But the Malaysian ringgit is looking surprisingly calm.

The currency looks set to weather any volatility fueled by a withdrawal of US stimulus as Malaysia’s economy rebounds amid an easing of virus-related curbs. Rising stock inflows and a sizable trade surplus will also provide a buffer.

The ringgit has bounced back from a one-year low as traders bet that a resumption in travel and business activity will haul the economy out of its worst slump since 1998. A policy review on Wednesday will be in focus, with the currency likely to get a boost if Bank Negara Malaysia delivers an upbeat assessment of the growth prospects.

The ringgit has climbed more than 2% in the past three months even as traders ramped up bets for the Fed to tighten policy. It rose 0.2% to 4.1403 per dollar on Friday.

Stock inflows have been a key pillar of support for the currency, with global funds scooping up about $400 million of local equities in October, the biggest monthly purchase since early 2018.

Standard Chartered Plc expects the ringgit to end the year at 4.15 as strong domestic fundamentals counter global risks.

“The improvement in Malaysia’s terms of trade driven by higher energy prices will offset other external headwinds like China’s growth and higher developed-market yield,” said Divya Devesh, head of ASEAN and South Asia FX research at Standard Chartered Bank in Singapore.

The trade surplus has widened to 26.1 billion ringgit ($6.3 billion) in September from the year’s low of 13.75 billion ringgit reached in May. Robust demand for the nation’s electronics and petroleum products has helped to boost the excess.

Malaysia’s economic growth is expected to accelerate to 5.5%-6.5% in 2022 from an estimated 3%-4% this year, Finance Minister Zafrul Abdul Aziz said on Friday. A resumption of activities and increased global demand, coupled with higher commodity prices, will support the expansion, he said.

Technicals indicate that the Malaysian currency has room to appreciate. The dollar-ringgit pair fell 1.1% in October, with the 50-day moving average capping its upside, and now looks on track to test support at its September low of 4.13.

A gauge of the pair’s one-week implied volatility is trading at around 6.01 vol versus the year’s high of 7.42, suggesting that traders aren’t bracing for excessive swings in the aftermath of the Fed’s Nov. 3 rate decision.

The ringgit slid over 7% from May through August 2013 after the Fed announced that it was planning to wind down its bond-buying program. — Bloomberg

Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



SM Investments Corp. announces annual stockholders’ meeting on April 26 – BusinessWorld Online ...


AyalaLand Logistics Holdings Corp. to conduct annual meeting of stockholders virtually on April 19 – BusinessWorld Online ...


Please see below for the Notice of the Annual Stockholders’ Meeting of Premium Leisure Corp. TO ALL STOCKHOLDERS: The Annual Stockholders’ Meeting of Premium...


Please see below for the Notice of the Annual Shareholders’ Meeting of Belle Corporation. To all Shareholders: The annual meeting of the shareholders of...


PHILIPPINE STAR/MICHAEL VARCAS By Keisha B. Ta-asan, Reporter THE BANGKO Sentral ng Pilipinas (BSP) is likely to pause its current tightening cycle in May,...


BW FILE PHOTO THE NATIONAL Government’s (NG) gross borrowings declined by 16.5% as of end-January, the Bureau of the Treasury (BTr) said. Based on...

You May Also Like


COVID-19 has had a significant impact on the mental health of Filipinos across different groups all over the archipelago. From frontline workers, parents balancing...


REUTERS By Luz Wendy T. Noble, Reporter The country’s foreign exchange buffers slightly increased as of end-October as the value of the central bank’s...


BW FILE PHOTO GROSS BORROWINGS by the National Government reached P2.6 trillion as of end-September as it continued to raise funds to respond to...


KARASOLAR.COM TENA, Ecuador — Ecuador’s rainforest Achuar people say their ancestors long dreamed of a “fire canoe” or “electric fish” that would let them...

Disclaimer: Respect, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2022 Respect Investment. All Rights Reserved.