New Straits Times - - Business - Rupa Damodaran

Credit Suisse has re­vised its fore­cast for the ring­git ver­sus the US dol­lar to 4.45 from 4.50, say­ing for­eign ex­change (forex) flow pres­sures seem more bal­anced now.

The pair will be rel­a­tively sta­ble around the cur­rent level and the out­look may turn pos­i­tive for the ring­git to­wards next month.

Credit Suisse said net forex in­flows from trade had risen, while for­eign sell­ing of bonds had eased. “A sea­sonal rise in div­i­dend repa­tri­a­tion around April could turn the bal­ance to­wards net in­flows. How­ever, we think ap­pre­ci­a­tion pres­sure may be met by a rise in cen­tral bank in­ter­ven­tion,” it said.

The ring­git was quoted at 4.4542 against the US dol­lar yes­ter­day from Thurs­day’s 4.4500.

The re­search house has main­tained its 12-month fore­cast for ring­git at 4.55.

It ex­pects a po­ten­tial ex­pan­sion of the United States fis­cal deficit to drive dol­lar strength later this year.

Ex­ports and Malaysia’s terms of trade have im­proved, and Bank Ne­gara Malaysia’s new rules re­quire higher rates of con­ver­sion of forex pro­ceeds into ring­git.

“Ex­port con­ver­sion into ring­git ex­ceeded im­ports by US$0.37 bil­lion in De­cem­ber and US$0.74 bil­lion in Jan­uary. These are still small rel­a­tive to over­all monthly trade sur­plus of about US$2 bil­lion, but will likely rise fur­ther in the com­ing months, as the full ef­fect of the new pol­icy kicks in,” said the firm.

The ring­git was quoted at 4.4542 against the US dol­lar at the close yes­ter­day from Thurs­day’s 4.4500.

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