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Malaysian Ringgit Optimistic to Stable This Week Against Fed

The Malaysian Ringgit is considered quite optimistic for trading this week. One of the main reasons for this is that Fed inflation data is still a global concern. To overcome a wrong decision for Malaysia, the Central Bank has made a decision!

According to Bank Muamalat Malaysia Bhd, head of economics and market analysis, Mohd Afzanizam Abdul Rashid, Malaysia will pay close attention to the US inflation report. He also said that Malaysia wanted to prevent the decision from the US Federal Open Market.

"Perhaps, the blackout period for the Malaysian economy is preventing US Federal Open Market Committee (FOMC) members, will start speaking openly to the general public before the meeting, and this aims to provide stability to the currency market,"

"The Ringgit direction will depend significantly on the US macro data release. This could allow the Fed to stick to its 25-basis point hiking pace as is currently the case. And this also makes bad US non-farm payrolls, but can make inflation data softer,"

Mohd Afnizan Abdul Rashid added: "If something like this happens, then this can provide some modest relief to the Malaysian mining sector, such as oil and other commodities. In recent times the US dollar's strength to fade also relate with activity with China,"

Ringgit Might See Trading in a Tight Range This Week, But Malaysia Central Bank Has Found a Way to Overcome Slowdown Weighs

From this, the local currency ended the week lower than the US Dollar. On a week-on-week basis, the Ringgit was weaker at 4.5810/5220 versus 4.4627/4780 a week earlier. This could be a sign of depreciation of the Ringgit against any other primary currency.

The local note also adds weekly price comparisons from the Ringgit to the Great British Pound, Singapore Dollar, and Euro to the Japanese Yen. With this, it showed worrying economic signals and growing concerns over the slowdown in global growth.

But the Central Bank of Malaysia said it had found the most appropriate formula to make the Ringgit move more stable and not be affected by significant currencies too significantly. Bank Negara Malaysia sets the same key rate of 2.75%.

Bank Negara Malaysia said that economic growth is expected to be moderate, mainly due to the global cooling demand. This was done with the aim that, later, the movement of the Ringgit currency could affect outturn and be driven by many vital sectors in Malaysia.

"Further normalization to the degree of monetary policy accommodation will probably try to be adjusted to the conditions. The implications of the domestic inflation and growth outlook also make the government expects an increase in the economy below 5%," stated by BNM.

To overcome this, The Monetary Policy Committee of Bank Negara Malaysia has fixed the overnight policy rate of 2.75%. Bank Negara Malaysia also said that the current OPR level is accommodating and supportive, especially for the Malaysian currency.


Malaysia's Economy is Also Believed to not Experience a Downturn in 2023 as the Inflation Rate Declines.

With the current stance policy rate, this is the case with Bank Negara Malaysia which is quite confident about the country's economic performance.

Malaysia's economy is said to not experience a downturn during 2023, and the main reason for this is due to the declining inflation rate. Malaysia's inflation has dropped from 3.8% to 3.7%, a reasonable rate compared to other countries.

From the global outlook, Malaysia's economic performance is entirely satisfactory. Deputy Finance Minister, Datuk Seri Ahmad Maslan, is also quite sure of this.

The International Monetary Fund (IMF) and the World Bank have released economic growth data for Malaysia. It is said that this movement is in a positive direction, in the range of 4.4 to 4. And the Malaysian government and central bank will prioritize economic growth.



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