Ringgit up as IMF raises global growth projection to 3%

 

KUALA LUMPUR: The ringgit continued to strengthen against the US dollar at the close today, lifted by the International Monetary Fund’s (IMF) positive revision of its 2023 global economic growth forecast, said an analyst.

The multilateral organisation has raised its 2023 global growth forecast to 3%, up 0.2 percentage point from its previous forecast in April.

SPI Asset Management managing director Stephen Innes said the new forecast should come as positive news for Asian exporters, including those based in Malaysia.

The updated forecast, he said, should provide a better regional outlook and help alleviate economic concerns.

Innes also noted that the market may begin to anticipate possible interest rate cuts as inflation shows signs of decreasing.

“Overall, these developments are positive for the ringgit and investors may soon feel more confident in buying Malaysian assets as a result,” he told Bernama.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said all eyes will be on the Federal Open Market Committee’s decision on US interest rates tonight.

“Any indication for a softer tone would be positive for emerging currencies including the ringgit,” he said.

At 6pm, the local currency gained to 4.5470/4.5505 against the greenback compared with 4.5615/4.5650 at yesterday’s close.

Meanwhile, the local unit was traded mostly lower against a basket of major currencies.

It improved against the euro to 5.0353/5.0392 from 5.0368/5.0407 at Tuesday’s close, but depreciated vis-a-vis the British pound to 5.8715/5.8761 from 5.8547/5.8592 yesterday and inched down versus the Japanese yen at 3.2402/3.2429 from 3.2266/3.2293 previously.

At the same time, the local currency was traded mostly higher against other Asean currencies.

The ringgit rose versus the Singapore dollar to 3.4265/3.4297 from 3.4325/3.4354 at the close on Tuesday, appreciated against the Indonesian rupiah to 302.6/303.0 from 304.0/304.5 and increased vis-a-vis the Philippine peso to 8.32/8.33 from 8.36/8.37 previously.

However, it dropped against the Thai baht to 13.2747/2904 from 13.2148/2300 yesterday. - FMT