Ring­git to stay volatile in near term: RHB

The Sun (Malaysia) - - SUNBIZ -

KUALA LUMPUR: The ring­git is ex­pected to re­main volatile in the near term on the vul­ner­a­bil­ity in the large for­eign hold­ings of fixed in­come in­stru­ments in the coun­try and the chal­leng­ing global eco­nomic en­vi­ron­ment.

In a note yes­ter­day, RHB Re­search said the other fac­tors in­cluded the pos­si­bil­ity of a rate in­crease by the US Fed­eral Re­serve and a fur­ther de­val­u­a­tion of China’s yuan.

“The lo­cal unit is ex­pected to trade at the RM3.90-RM4.20 range against the US dol­lar be­fore set­tling at RM4.05 to the US dol­lar at the end of the year as cap­i­tal flows im­proved,” it said.

RHB Re­search said Bank Ne­gara Malaysia’s (BNM) for­eign ex­change re­serves rose by a mar­ginal US$0.1 bil­lion to US$97.8 bil­lion as at Oct 31, 2016 from US$97.7 bil­lion at the end of Septem­ber.

It said the amount of to­tal for­eign cur­rency de­posits slipped by 4.5% in Septem­ber to about RM116.5 bil­lion fol­low­ing a gain of 3.6% in Au­gust.

Mean­while, de­posits by fi­nan­cial in­sti­tu­tions grew at a slower pace in Septem­ber, partly mit­i­gated by a re­bound in de­posits of statu­tory agen­cies, it said.

“The amount of ex­cess liq­uid­ity mopped up by BNM fell to an es­ti­mate of RM139.7 bil­lion as at end-Oc­to­ber 2016, from RM143.8 bil­lion at end-Septem­ber, 2016,” it said. – Ber­nama

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