Affin Hwang: Fund inflows expected to set ringgit on uptrend
KUALA LUMPUR: The recent inflow of funds into the country is expected to set the ringgit on an uptrend against the US dollar this year.
Affin Hwang Asset Management Bhd managing director Teng Chee Wai said he was bullish over the ringgit’s performance with the country’s improving economic fundamentals and as Bank Negara Malaysia’s reserves continued to rise.
“It will take a while for the ringgit to touch between 4.20 and 4.25. With our trade surplus contributing to the local unit’s appreciation, investor confidence at some point will return and make it more sustainable,” said Teng during his presentation at the Affin Hwang Asset Management Investment Forum 2017 on “What Trump’s Presidency means for Asian and Malaysian Markets?”, here, on Saturday.
He said currently, the ringgit’s movement was still tentative and to reach to the level of 4.25, Bank Negara would first need to replenish money lost over the past few months.
Teng said only then would Bank Negara allow the ringgit to appreciate, with more inflows coming into the country and the market starting to see earnings follow.
“Unless something big happens like an election result, then the ringgit may be impacted,” he added.
Teng said Asia’s markets had been catching up well this year, compared with the time when China was having an economic slowdown and of Donald Trump winning the United States presidency, which saw the greenback rally.
“The situation is reversing and we are seeing various asset classes in Asia doing well,” he added.
Meanwhile, at a separate session, Deutsche Bank Asia FX Research global markets strategist Mallika Sachdeva said the ringgit would not be weakening any further, having gone through its worst performance.
“It will also not strengthen so much this year in needing time to recover, provided trends over the past few weeks continue, and the economic environment is stable,” she added. Bernama