Ringgit rebounds on better Q3 GDP Expectation

KUALA LUMPUR: The ringgit rebounded against the US dollar at the close today on anticipation of better Malaysia's gross domestic product (GDP) growth for the third quarter, which slated to be announced by Bank Negara Malaysia (BNM) on Friday.

The ringgit rose 0.45% to a 12-month high against the US dollar to 4.1748 at 5.30pm today.

At 6pm, the local unit was traded at 4.1730/1760 against the greenback from 4.1925/1955 yesterday.

Affin Hwang Asset Management Senior Portfolio Manager Ahmad Raziq Ab Rahman said Malaysia's 3Q17 GDP is expected to be in line with the 5.8% growth in Q2 of this year, if not stronger.

"BNM held the benchmark overnight policy rate at 3% last week during its policy meeting, but hinted at potential interest rate hike next year.

"The more hawkish policy statement from BNM comes at the onset of stronger global and domestic macroeconomic conditions, citing Malaysia's economic growth had become more entrenched and would remain strong next year.

"We expect BNM to raise rates in the first half of 2018," Ahmad Raziq said.

He also noted that the situation is good for the ringgit as it rallied to 4.19 against the dollar last week following the statement.

Globally, the ongoing uncertainty over the proposed tax reforms weighs heavily on the dollar.

The ringgit traded mixed against a basket of major currencies.

It strengthened against the Singapore dollar to 3.0765/0792 from 3.0793/0824 yesterday, and gained against the British pound to 5.4817/4873 from 5.4901 on Tuesday.

The local note declined further versus the euro to 4.9404/9444 from Tuesday's 4.9119/9171 and weakened vis-a-vis the yen to 3.6988/6025 from yesterday's 3.6847/6884. — Bernama