Ringgit against the USD by end 2013 ?



MALAYSIA’S currency, along with several other regional currencies, has regained some lost ground in recent weeks after suffering a major sell-off between August and early September. Quoted at around 3.16 per US dollar as at Oct 24, 2013, the ringgit’s performance represented an appreciation of 5% from Aug 28 when the ringgit fell to a three-year low of 3.33 per unit of the greenback.

And now, analysts believe the direction for the ringgit towards the end of the year is only up, thanks to the return of foreign capital, as concern over the US Federal Reserve planning to wind down their quantitative easing (QE) programme subsides. RHB Research Institute Sdn Bhd expects the ringgit to reach 3.10 per US dollar by the end of this year. This compared with the ringgit’s value at 3.05 against the greenback at the start of 2013. 

“The ringgit, however, is still vulnerable to global swing in risk appetite given that the US fiscal brinkmanship will likely come back to haunt the economy in the early part of the year and expectation of the QE tapering remains,” it warns.

Risks to outlook
According to ADB, economies in developing Asia, including Malaysia, in general face three major risks. These include increased volatility in global and regional financial markets due in particular to uncertainties over monetary and fiscal policies in advanced economies; a more pronounced slowdown in major regional economies, such as China, India and Indonesia, which will affect other economies within the region; and a disruption in the recovery of the Group of Three, or G3, economies, namely the United States, Europe and Japan.

According to ADB, developing Asia’s growth will likely slow slightly this year before picking up next year. In general, it expects developing Asia to grow 6% in 2013, slightly below the 6.1% growth last year, before recovering to a 6.2% growth in 2014.
Source: theSTAR 26-10-2013
 



Post a Comment