Saturday May 20, 2017
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Bank Negara Malaysia Governor Datuk Seri Muhammad Ibrahim says the ringgit is stable due to measures to develop the domestic financial market. — File picBank Negara Malaysia Governor Datuk Seri Muhammad Ibrahim says the ringgit is stable due to measures to develop the domestic financial market. — File picKUALA LUMPUR, May 20 — The ringgit is expected to stay firm at around the 4.30 level to the US dollar next week, driven by the positive Gross Domestic Product (GDP) growth spillover effect.

The encouraging GDP data for the first quarter 2017 (1Q17) released by Bank Negara Malaysia (BNM) yesterday helped strengthen the local unit by 0.18 per cent and the positive effect is expected to be extended.

This is moreso when the Malaysian economy is in a recovery mode arising from the stronger performance in exports and domestic capital expenditure.

Malaysia's economy recorded robust growth of 5.6 per cent in the 1Q17 against the 4.1 per cent in the same quarter of 2016, boosted by strong domestic demand and private expenditure.

It was the best since the corresponding quarter of 2015, which saw the GDP at 5.8 per cent.

When announcing the 1Q17 GDP data, Bank Negara Malaysia Governor Datuk Seri Muhammad Ibrahim said the ringgit showed stability due to measures to develop the domestic financial market, and the trend is now, better reflected in the strength of the ringgit vis-a-vis the strength of the economy.

“As we move forward, the ringgit will further reflect the strength of the Malaysian economy. Continued external uncertainties though might result in higher volatility in the ringgit's movement,” he added.

Standard Chartered Bank Malaysia, meanwhile said, there is significant room for the ringgit to catch up for further gains, given the scale of portfolio outflows in the past four years.

“While a stronger ringgit might be seen as a signal of confidence in the domestic economy, we think the central bank may aim to rebuild its foreign exchange reserves more determinedly at some point,” it added, in a statement.

For the week just-ended, the ringgit moved between the range of 4.3440 and 4.3140 against the US dollar.

On a Friday-to-Friday basis, it traded higher at 4.3180/3230 against the greenback from 4.3440/3470.

The ringgit, however, ended mostly lower against other major currencies.

The local note declined against the Singapore dollar to 3.1056/1114 from 3.0859/0900 and edged down against the yen to 3.8723/8782 from the 3.8213/8246 recorded last week.

It slipped against the British pound to 5.6177/6247 from 5.5859/5902 and was lower against the euro at 4.8176/8245 from 4.7232/7269. — Bernama

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