Ring­git hits 10-month low against US dol­lar

The Sun (Malaysia) - - SPEAK UP - BY LEE WENG KHUEN

PE­TAL­ING JAYA: The ring­git con­tin­ued its down­ward spi­ral yes­ter­day in the wake of Don­ald Trump’s shock win in the US pres­i­den­tial elec­tion, de­pre­ci­at­ing as much as 1.16% to 4.2843 against US dol­lar, the low­est in the past 10 months.

The ring­git traded at 4.2797 to the green­back as at 5pm, Bloomberg data showed.

The Malaysian stock mar­ket, how­ever, re­bounded. The FBM KLCI rose 5.12 points or 0.31% to close at 1652.74 points.

AmRe­search be­lieves the ring­git will re­main on a weaker bias in De­cem­ber, with full-year fore­casts of 4.08-4.09 and 4.11-4.13 for 2016 and 2017, re­spec­tively.

MIDF Re­search is main­tain­ing its ring­git fore­cast for 2016 at 4.10 to the US cur­rency, but is pro­jected to be stronger in 2017 in an­tic­i­pa­tion of the weak­en­ing of the dol­lar due to height­ened un­cer­tain­ties over Trump’s poli­cies.

While the mar­ket is ex­pected to un­dergo a pe­riod of volatil­ity, Hong Leong In­vest­ment Bank (HLIB) Re­search said, global liq­uid­ity re­mains abun­dant with on­go­ing quan­ti­ta­tive eas­ing by the Euro­pean Cen­tral Bank and the Bank of Ja­pan, pro­vid­ing a buf­fer to cush­ion the down­side im­pact of any se­vere cor­rec­tion.

An­a­lysts be­lieve the Trump win will likely see the US Fed­eral Re­serve put off an ex­pected De­cem­ber in­ter­est rate in­crease, which will be a def­i­nite pos­i­tive for the ring­git as funds will be flow­ing back to emerg­ing mar­kets.

It also ex­pects Bank Negara Malaysia to con­tinue its ac­com­moda­tive and sup­port­ive mone­tary pol­icy in the near fu­ture and a pos­si­ble rate cut is ex­pected should the after-ef­fect of the US pres­i­den­tial elec­tion re­sult be larger than ex­pected.

AmRe­search sees the Overnight Pol­icy Rate (OPR) stay­ing un­changed at 3.00% in 2016, but main­tains its view of a 40% prob­a­bil­ity for a 25 ba­sis-point rate cut in the Nov 23 Mone­tary Pol­icy Com­mit­tee meeting.

Com­ment­ing on trade be­tween Malaysia and the US, MIDF Re­search said Malaysia’s ex­ports to the US are still sig­nif­i­cant de­spite not be­ing as dom­i­nant as it was be­fore.

As of Septem­ber, Malaysia’s ex­ports

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