KUALA LUMPUR: The ringgit is expected to remain stable and trade in a range of between 3.97 and 4.30 against US dollar in 2020 despite headwinds and unpredictable exogenous variables in the global financial markets, said IQI Global chief economist Shan Saeed.
He said the forecast was based on several premises including that the ringgit will follow the trend of the Chinese yuan and crude oil price movement.
“The ringgit is going to monitor endogenous and exogenous variables for its movement in 2020.
“I have been observing the ringgit movement in the last seven years very closely and it has maintained structural stability in wake of the currency war which was commenced by the US Federal Reserve since December 2008,“ he told Bernama.
Shan opined many global central banks would be heading to lower interest rates regime in 2020 to ward off recession concerns.
He said Bank Negara Malaysia (BNM) was also expected to adjust policy levers as per the market forces with the discount rate to meander at around 2.5% to 3%next year.
“Bank Negara still has a lot of options to manoeuvre through monetary levers to spur growth and can deliver economic outcomes successfully.
“Plenty of policy levers ammunition at hand to fire up the economy. It is always the monetary policy that drives economy not the fiscal policy which has limited economic outcomes and impact on gross domestic product outlook,“ he said, adding the markets have confidence in BNM to stimulate growth through prudent and effective use of the monetary policy. – Bernama