HLIB: Ringgit expected to slide back to RM4.30-4.40 range

PETALING JAYA: HLIB research expects the ringgit to slide back to the RM4.30-4.40 mark to US$1 at the end of the year in the wake of the US Federal Reserve's (US Fed) hints at a balance sheet normalisation process relatively soon.
The US Fed's which convened its Federal Open Market Committee (FOMC) policy meeting decided to keep its Fed fund rate unchanged at 1.0%-1.25% and hinted at the start of the reduction of its US$4.5 trillion balance sheet.
The research house said these developments leave the ringgit with limited upside and room for appreciation.
"The balance sheet normalization process may lead to more moderate capital flows to emerging market economies, including Malaysia," it added in a note.
HLIB expects the Fed's to retain the policy rate at current levels until the end of the year and begin its balance sheet reduction process after September.
The Fed's plans to begin the shrinking process of its bond portfolio of US$4.5 trillion, at US$10 billion a month. The ringgit stood at RM4.2765 against the greenback today.