Economy / Malaysia
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Macroeconomic Forecast Malaysia
May 2006 | Macroeconomic ForecastsSorry, you must be a subscriber to view this article in full. If you are a subscriber please login.
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Our end-2006 FX forecast remains MYR3.60/US, with upside risks, as the ringgit benefits from domestic monetary tightening and the gradual appreciation of other regional currencies against the US$, especially the Chinese yuan. A fresh 25bps hike in the overnight lending rate to 3.50% on April 26 provided a further boost to the unit, which hit an eight-year high of MYR3.61/US$ in mid-May. BNM, the central bank, believes a stronger ringgit is sustainable, on the basis that non-dollar currencies have strengthened across the board. However, stability is key. A sharp spike in the ringgit would certainly not be welcome by Malaysian exporters and the BNM would intervene to restrain any such volatility.