In a note, the research firm said the local currency would also get a boost from the commodities sector’s recovery and when policies by US President Donald Trump’s administration started to disappoint the market.
“Nevertheless, volatility in the ringgit could persist in the near-term given expectations of further US rate hikes, vulnerability from large foreign holdings of fixed income instruments in the country and volatility of oil prices,” it said.
After appreciating by 1.8% for the whole of April, the ringgit rose further by 0.3% to RM4.3365 vis a-vis the US dollar in the first week of May.
Malaysia’s foreign exchange reserves rose by US$700mil to US$96.1bil as at April 28 from US$95.4bil in March due to foreign inflow of funds, driven by Bank Negara Malaysia’s requirement to convert 75% of export proceeds into ringgit, and the central bank’s efforts at managing other foreign capital outflows. – Bernama