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Malaysian ringgit undervalued, hoped to trade higher

An official of Malaysia’s central bank expected the country's ringgit to trade higher on the back on positive economic prospects.
Malaysian ringgit undervalued, hoped to trade higher ảnh 1The Malaysian ringgit is counted at a currency exchange office in Kuala Lumpur. (Photo: AFP/VNA)
KualaLumpur (VNA) – An official of Malaysia’s central bank expectedthe country's ringgit to trade higher on the back on positive economic prospects.

Governorof BankNegara Malaysia (BNM) Abdul RasheedGhaffour said the ringgit is currently undervalued but ought to be tradedhigher thanks to Malaysia’s positive economic fundamentals and prospects.

The currency hit a 26-year low on February 20 to trade at 4.80MYR per USD.

Dr MohdAfzanizam Abdul Rashid, chief economist at Bank Muamalat MalaysiaBhd, noted the local note’s fair value is closer to 3.90 MYR per USD, pointingout that the ringgit has been hovering below 100 points on both theNominal Effective Exchange Rate (NEER) and Real Effective Exchange Rate (REER)indices.

Theoretically,the ringgit should move towards its fair value. However, at the currentjuncture, the forex market is too distorted by external factors, leading the ringgitto deviate from its fair value of 3.90 MYR per USD, he added.

Afzanizamheld that Malaysia’s current account surplus at 1.2% of gross domestic product(GDP) is one of the factors that could strengthen the ringgit.

Tan Teng Boo, managing director of Capital Dynamics Asset ManagementSdn Bhd, forecast the ringgit could trade at 4.20 - 4.40 per USD by the end of2024 in view of a potential interest rate cut by the US Federal Reserve thisyear.

Theringgit has lost close to 4% in value toits lowest level since January 1998. Meanwhile, regional currencies like theKorean won and Taiwanese dollar depreciated by 0.2% and 0.3%,respectively./.
VNA
#Malaysia#ringgit#Bank Negara Malaysia#Malaysia’s central bank#US Federal Reserve#Vietnamplus#Vietnam News Agency
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