Emerging currencies, including ringgit, to remain volatile

KUALA LUMPUR: Emerging market currencies, including the ringgit, is expected to remain volatile as the uncertainty worldwide is forecast to remain high in 2017.

World Bank Group Senior Country Manager for Malaysia Dr Rafael Munoz Moreno said the ringgit and other emerging currencies reeled under heavy external pressure like the normalisation of the US monetary policy and potential change in its fiscal trade policy.

“The ringgit’s movement will depend a lot on how these external policies materialise.

“We have yet to see how the possible change in US fiscal policies will affect interest rates and global economies,” he told reporters after launching the 15th edition of the ‘Malaysia Economic Monitor’ published by the World Bank yesterday.

Moving into 2017, Moreno said negotiations on Britain’s exit from the Europe Union (Brexit) was expected to be initiated in the next six months.

“It will provide insight into how this development will affect the European Union.

“Next year will be election year for France and Germany.

“Concerns will arise as to whether there will be policy changes in both countries and within the European Union,” he added.

These events are expected to have an impact on the currency movements of emerging countries in 2017, he said. — Bernama