"it was natural for the ringgit to get stronger as the country no longer fixes the exchange rates."Datuk Seri Abdullah Hj. Ahmad Badawi, Prime Minister
KUALA LUMPUR, May 26 - The ringgit is likely to resume its positive rally against the U.S. dollar next week on strong commercial interest for the local unit as more foreign funds continue to hunt for the ringgit in anticipation of the country's better economic performance, a dealer said.
He said the sentiment on the local currency market remained bullish in reaction to a report quoting Prime Minister Datuk Seri Abdullah Ahmad Badawi as saying that the recent strengthening of the ringgit has not been a big problem as it has not affected the country's trade or investment.
In an interview with Japan's Nikkei business daily on Friday, Abdullah was reported as saying that "it was natural for the ringgit to get stronger as the country no longer fixes the exchange rates."
The ringgit was pegged against the dollar at RM3.80 when the government imposed capital controls in September 1998 to ward off currency speculators during the Asian financial crisis. The peg was lifted in July 2005.
The ringgit scaled to as high as RM3.39 against the U.S. dollar on Monday due to aggressive buying of the local unit after Asian currencies rose in reaction to China's decision to widen the yuan's trading band.
On Tuesday, the local unit continued to strengthen to a new nine-year high of RM3.38 per dollar on active buying by local and foreign funds.
The extended gains of the ringgit, according to the dealer, came after Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz remarked that the ringgit's strong gains are in line with the country's favourable economic performance itself and not related to China's yuan.
The Malaysian Institute of Economic Research said last Monday that the country's economy is expected to pick up in the second half of the year due mainly to higher commodity prices.
Second Finance Minister Tan Sri Nor Mohamed Yakcop on Tuesday said the record salary hike for civil servants announced by the prime minister would contribute 0.5 percent to the country's economic growth this year.
"The upward movement of the ringgit last week has raised expectations that the ringgit is well-placed to reach RM3.30 against the greenback soon, more so given the country's strong economic fundamentals," said the dealer.
He also said the pace of the ringgit appreciation, which stood at 3.38 level to the dollar, should not pose any major problem that impacts the country's competitiveness, as regional currencies are also appreciating.
Overall, this week's trading saw the local currency drawing interest from investors despite some profit-taking activities toward the end of the week.
On a week-to-week basis, the ringgit was higher against the U.S. dollar at 3.3905/3925 from last week's Friday level of 3.4000/4020.
Against the Singapore dollar, the local unit appreciated at 2.2179/2202 from 2.2266/2294 in the previous week while it increased against the yen at 2.7931/7954 from 2.8007/8035.
The ringgit went down against the British pound at 6.7325/7378 from 6.7028/7084, but firmed against the euro at 4.5545/5585 from 4.5876/5907.
He said the sentiment on the local currency market remained bullish in reaction to a report quoting Prime Minister Datuk Seri Abdullah Ahmad Badawi as saying that the recent strengthening of the ringgit has not been a big problem as it has not affected the country's trade or investment.
In an interview with Japan's Nikkei business daily on Friday, Abdullah was reported as saying that "it was natural for the ringgit to get stronger as the country no longer fixes the exchange rates."
The ringgit was pegged against the dollar at RM3.80 when the government imposed capital controls in September 1998 to ward off currency speculators during the Asian financial crisis. The peg was lifted in July 2005.
The ringgit scaled to as high as RM3.39 against the U.S. dollar on Monday due to aggressive buying of the local unit after Asian currencies rose in reaction to China's decision to widen the yuan's trading band.
On Tuesday, the local unit continued to strengthen to a new nine-year high of RM3.38 per dollar on active buying by local and foreign funds.
The extended gains of the ringgit, according to the dealer, came after Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz remarked that the ringgit's strong gains are in line with the country's favourable economic performance itself and not related to China's yuan.
The Malaysian Institute of Economic Research said last Monday that the country's economy is expected to pick up in the second half of the year due mainly to higher commodity prices.
Second Finance Minister Tan Sri Nor Mohamed Yakcop on Tuesday said the record salary hike for civil servants announced by the prime minister would contribute 0.5 percent to the country's economic growth this year.
"The upward movement of the ringgit last week has raised expectations that the ringgit is well-placed to reach RM3.30 against the greenback soon, more so given the country's strong economic fundamentals," said the dealer.
He also said the pace of the ringgit appreciation, which stood at 3.38 level to the dollar, should not pose any major problem that impacts the country's competitiveness, as regional currencies are also appreciating.
Overall, this week's trading saw the local currency drawing interest from investors despite some profit-taking activities toward the end of the week.
On a week-to-week basis, the ringgit was higher against the U.S. dollar at 3.3905/3925 from last week's Friday level of 3.4000/4020.
Against the Singapore dollar, the local unit appreciated at 2.2179/2202 from 2.2266/2294 in the previous week while it increased against the yen at 2.7931/7954 from 2.8007/8035.
The ringgit went down against the British pound at 6.7325/7378 from 6.7028/7084, but firmed against the euro at 4.5545/5585 from 4.5876/5907.
1 comments:
Re: “The ringgit is likely to resume its positive rally against the U.S. dollar next week ...”
A “Federal Reserve Note” is not a U.S.A. dollar. In 1973, Public Law 93-110 defined the U.S.A. dollar as consisting of 1/42.2222 fine troy ounces of gold.
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