News & Articles Ringgit may trend around RM4.20 to greenback in 2016
Ringgit may trend around RM4.20 to greenback in 2016
17 Dec 2015
The ringgit is expected to remain stable at the average level of 4.20 against the US dollar next year amid US interest rate hike, Minister in the Prime Minister’s Department Datuk Seri Abdul Wahid Omar said.
He said the US Federal Reserve’s (Fed) move had been long anticipated by the market and the 0.25% hike was very much within the expectations of most analysts.
I think what is equally important is the indication from the Fed that the subsequent interest rate hikes would be gradual.
“It is a path towards gradual interest rate normalisation and that would account to the development of the US economy,” he said after delivering a talk on the “Economic Outlook: The Way Forward For Malaysia” here today.
The talk was organised by the Harvard Business School Alumni Club of Malaysia and Universiti Teknologi Malaysia’s International Business School.
The Fed yesterday raised interest rates by 0.25 percentage points, its first increase since 2006. The move takes the range of rates banks offer to lend to each other overnight – the Federal Funds rate – to between 0.25% and 0.5%.
Asked on possible capital outflows following the US interest rate hike, Abdul Wahid said Malaysia’s economic fundamentals were strong with visible level of fiscal discipline and adequate reserves to deal with the situation.
“As we move forward, with the economy continues to grow, I think there are little reasons for people to make any unexpected moves. Having said that, we will always move forward and continue to embrace proactive policies.”
On another note, Abdul Wahid said the 2016 Budget would be reviewed if crude oil prices continued to stay low.
The 2016 Budget was based on the assumption that the Brent Crude were to average at US$48 per barrel next year.
The crude oil global benchmark, Brent crude for February delivery declined 29 cents to US$37.10 at early session today.
“If indeed this is the new normal, proper adjustments will be made. My view is that I don’t think crude oil can be at such a low level for a prolong period. There will come a time it will rebound,” Abdul Wahid said.
The ringgit closed marginally higher against the US dollar today and at 5 pm, the local unit was quoted at 4.3110/3160 against the greenback from 4.3200/3300 yesterday.
The dealer said the ringgit and regional currencies rose after Fed said the subsequent interest rate increases would be gradual.
The local unit was also traded higher against other major currencies. It strengthened against the Singapore dollar to 3.0497/0543 from yesterday’s close of 3.0630/0709 and was higher against the yen at 3.5209/5259 from 3.5424/5518 yesterday.
The ringgit appreciated against the British pound to 6.4402/4494 from yesterday’s close of 6.4882/4045 and rose against the euro to 4.6843/6902 from 4.7252/7366.
He said the US Federal Reserve’s (Fed) move had been long anticipated by the market and the 0.25% hike was very much within the expectations of most analysts.
I think what is equally important is the indication from the Fed that the subsequent interest rate hikes would be gradual.
“It is a path towards gradual interest rate normalisation and that would account to the development of the US economy,” he said after delivering a talk on the “Economic Outlook: The Way Forward For Malaysia” here today.
The talk was organised by the Harvard Business School Alumni Club of Malaysia and Universiti Teknologi Malaysia’s International Business School.
The Fed yesterday raised interest rates by 0.25 percentage points, its first increase since 2006. The move takes the range of rates banks offer to lend to each other overnight – the Federal Funds rate – to between 0.25% and 0.5%.
Asked on possible capital outflows following the US interest rate hike, Abdul Wahid said Malaysia’s economic fundamentals were strong with visible level of fiscal discipline and adequate reserves to deal with the situation.
“As we move forward, with the economy continues to grow, I think there are little reasons for people to make any unexpected moves. Having said that, we will always move forward and continue to embrace proactive policies.”
On another note, Abdul Wahid said the 2016 Budget would be reviewed if crude oil prices continued to stay low.
The 2016 Budget was based on the assumption that the Brent Crude were to average at US$48 per barrel next year.
The crude oil global benchmark, Brent crude for February delivery declined 29 cents to US$37.10 at early session today.
“If indeed this is the new normal, proper adjustments will be made. My view is that I don’t think crude oil can be at such a low level for a prolong period. There will come a time it will rebound,” Abdul Wahid said.
The ringgit closed marginally higher against the US dollar today and at 5 pm, the local unit was quoted at 4.3110/3160 against the greenback from 4.3200/3300 yesterday.
The dealer said the ringgit and regional currencies rose after Fed said the subsequent interest rate increases would be gradual.
The local unit was also traded higher against other major currencies. It strengthened against the Singapore dollar to 3.0497/0543 from yesterday’s close of 3.0630/0709 and was higher against the yen at 3.5209/5259 from 3.5424/5518 yesterday.
The ringgit appreciated against the British pound to 6.4402/4494 from yesterday’s close of 6.4882/4045 and rose against the euro to 4.6843/6902 from 4.7252/7366.
Source: Therakyatpost.com