KUALA LUMPUR: Malaysia’s ringgit could appreciate to RM4.00 against the greenback in the event of a weak dollar.
OCBC Bank chief economist Selena Ling told reporters at a press conference today, that the strengthening of the ringgit will have less to do with domestic factors as the slowdown in economic growth is seen as benign and an unlikely change in overnight policy rate (OPR).
“From that angle, a lot of strength of the ringgit is on a weak dollar story,” said Ling.
She said the broad weakness of the US dollar against Asian currencies by year end and the risk of the US economy falling into a recession next year are among the reasons that could be supportive to the ringgit’s strengthening.
“If anything, the domestic (in the US) policy pressures suggest that they won’t get anymore fiscal stimulus...the US dollar will not have the driver from a hawkish Fed (US Federal Reserve),” said Ling.
