Ringgit rises strongly against greenback on solid economic data


MO,12/1/2018, KUALA LUMPUR: The ringgit was significantly higher against the US dollar this morning, touching a level it had not seen since July 2016, as sentiment towards the local unit improved on the back of the country’s solid economic growth. At 9.16 am, the local unit stood at 3.9750/9780 against the greenback from 3.9850/9900 at the close yesterday.   A dealer said the ringgit has been undervalued for quite some time and given the release of promising economic data recently, it had started to trade towards its fair value.

Meanwhile, Kenanga Research said Malaysia’s industrial production index (IPI) registered a convincing growth of five per cent year-on-year in November, which surpassed its expectation of 4.3 per cent and Bloomberg’s median consensus of 4.6 per cent. “With the upbeat IPI data in November, we might see a relatively strong fourth quarter 2017 gross domestic product (GDP) growth. We therefore maintain our GDP forecast of 5.5 per cent for Q4 and 5.8 per cent for the full year of 2017.

“The higher-than-expected IPI growth may suggest that the economic growth trajectory could remain well above its potential or more than five per cent in Q4, bolstering the case for Bank Negara Malaysia to raise the overnight policy rate by 25 basis points as early as the first quarter 2018,” it said in a note here today. Meanwhile, the ringgit traded lower against a basket of major currencies.

It was lower against the Singapore dollar at 2.9928/9953 from 2.9886/9926 at the close yesterday and declined against the yen to 3.5734/5770 from 3.5695/5749.
The ringgit fell against the British pound to 5.3873/3918 from 5.3738/3821 and depreciated against the euro to 4.7915/7955 from 4.7605/7681. – Bernama

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Positive ringgit backed by robust economic growth

MO,11/1/2018, KUALA LUMPUR: The ringgit’s current upward momentum against major currencies is backed by the country’s robust domestic economy and healthy trade performance, underpinned by the recovery in global oil prices. Second Finance Minister Datuk Seri Johari Abdul Ghani said the ringgit was also supported by Malaysia’s strong export performance, which increased 20.2% from Jan-Nov 2017, as compared to the same period in 2016.

“The global economy is also showing positive growth momentum this year, and is forecast to ramp up between 3.7-3.8% this year (World Bank). This will positively impact Malaysia’s economic growth,” he told reporters after the launch of the new Register of Property Managers here, today. He said the ringgit’s performance so far is reflected by the positive sentiment in the local and global economies, with Malaysia’s gross domestic product (GDP) expected to grow between 5.0-5.5% this year.

Meanwhile, on the plan to impose a digital tax on the digital platform, Johari said the government is still awaiting feedback from the Organisation for Economic Co-operation and Development (OECD) countries on the right mechanism on the imposition.

“We are looking at a suitable mechanism for the tax as almost 20% of business transactions in Malaysian are now being done through the digital platform. The problem is, some of the companies, are not Malaysia-based.

“That’s why we are engaging the OECD countries to get their feedback and learn more about how they have been managing these digital companies, in terms of imposing tax on them,” he added. – Bernama

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Malaysia’s economic momentum to remain upbeat


MO,8/1/2018, KUALA LUMPUR: Malaysia’s economy will continue to perform strongly following solid trade numbers in November, AmBank Research said. The firm said domestic economy is expected to grow around 5.5 per cent this year, supported by domestic activities and export. “Both our exports and imports continued to perform favourably with November’s exports up for the 12th consecutive month at double digits by 20.4 per cent year-on-year while imports gained 21.2 per cent yoy, bringing the November’s trade balance at RM9.9 billion.

“We remain upbeat on the economic performance in part due to strong imports and capital (up 12.2 per cent yoy) and intermediate goods (+13.8 per cent yoy) which act as an injection to the overall economic activity. Besides, we foresee exports will continue to aid the overall economic activity,” AmBank Research said in a report today. The firm said its preliminary estimates showed the fourth quarter 2017 gross domestic product (GDP) of around 6.0 per cent with its full-year forecast at 5.9 per cent.

It expects exports to grow by 21 per cent yoy. AmBank Research said exports of electrical and electronics had continued to expand strongly by 21.0 per cent yoy in November from 16.9 per cent yoy in October. “E&E segment is envisaged to perform robustly, benefitting from the cyclical growth underpinned by a healthy external demand.” Exports were also being supported by chemical & chemical products (+20.2 per cent yoy), and manufacture of metals (20.8 per cent yoy) while petroleum products grew 1.2 per cent yoy.

Total export volume grew strongly by 9.7 per cent yoy in November. On the ringgit performance this year, AmBank Research said the local note is projected at 4.00 to 4.02 against US dollar for the full-year average. “We expect the US dollar/ringgit to remain on a strong note with our end-period projection at 3.95 which is our base case and best case is at 3.76,” it added.


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