Macroeconomic Forecast Malaysia

We maintain our end-2010 target for the Malaysian ringgit at MYR3.3000/US$, depreciating from the MYR3.1250/US$ level as of early September 2010. Indeed, our bearish ringgit view ties in with our below-consensus outlook for the Chinese yuan - a currency which the Malaysian currency tracks competitively. To be sure, the renminbi has been gradually depreciating towards our target of around CNY6.8300/US$, which was also the level that the yuan was pegged against the US dollar until late June. Moreover, the Bank Negara Malaysia is expected to maintain its overnight policy rate (OPR) at 2.75%, supporting our depreciatory stance for the ringgit.

To read the full article, please choose one of the following options: