KUALA LUMPUR: The ringgit is expected to rise moderately next week, driven mainly by strong domestic fundamentals, coupled with the higher oil prices, despite uncertainties in the global market.
Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said in the previous week the local note appreciated as the global economy continued to grapple with heightened uncertainties.
“These uncertainties resulted from the downward forecast revision of global growth by the International Monetary Fund, trade war between the US and China, UK Brexit, as well as the US government shutdown which has lasted more than a month,” he told Bernama.
Mohd Afzanizam said the greenback dropped on Friday, reflecting concern over the US government shutdown and its impact on the economy.
“This is especially true when the Federal Open Market Committee will meet for the first time in 2019 on Jan 29-30. The ongoing shutdown would bolster the case for no change in the Fed fund rate in the upcoming meeting.
“Next week, we believe the ringgit will move closer to its current support level of RM4.11,” he added.
Back home, the economist said the recent Bank Negara Malaysia’s decision to keep the overnight policy rate (OPR) at 3.25 per cent suggested that the degree of monetary accommodativeness is consistent.
The OPR, he noted would remain at the prevailing level throughout the year subject to the evolving economic outlook, which could also be a factor for a strong ringgit.
On a Friday-to-Friday basis, the local note eased to 4.1225/1275 from 4.1100/1150 against the greenback.
It slid against the Singapore dollar to 3.0346/0385 versus 3.0301/0342 and declined against the British pound to 5.3935/4004 from 5.3179/3248. - Bernama
