Ringgit set for more gain
The ringgit is expected to rise further after climbing to its strongest level in two months yesterday on the back of the interest in the upcoming general election.
The ringgit was traded sharply higher against the US dollar yesterday, reflecting brisk demand for the local note amid a firmer cash market, dealers told Bernama.
At 5pm, the local currency was quoted at 3.0790/0820 against the greenback compared with 3.0825/0845 at the close on Wednesday.
According to Bloomberg, the ringgit held its sixth day of gains, rising 0.05 per cent to 3.0820 against the greenback.
Some foreign investment banks such as Barclays remain bullish on the ringgit and expect further appreciation in the run-up to the poll, likely at the end of April, given a likelihood of the incumbent party winning the election.
This, Barclays said, would be consistent with its view that the US dollar-ringgit trading continues to move lower, particularly if local sentiment also embraces this view.
"A victory by the incumbent BN (Barisan Nasional) would likely raise the prospect of a greater focus by the new government on the real economy, where growth is relatively broadly balanced, the current account surplus is rising and inflation is relatively benign," it said yesterday.
But it is not just the Malaysian election that is likely to affect the ringgit movement.
Bank of Japan's (BoJ) policy decision under its new governor Haruhiko Kuroda yesterday could help the ringgit offset the election uncertainty.
Its forex strategists Paul Mackel and Perry Kojodjojo are bullish on the ringgit, baht and peso, particularly against the Singapore dollar, which is more subjected to global risk.
"Ultimately, Japan's policy action should be good for the rest of Asia, but for now we see North Asian currencies maintaining their underperformance versus most of the South Asian currencies."
HSBC regional economist Frederic Neumann said with the BoJ move, liquidity will pour into regional financial markets already drowning in the stuff.
Thailand, Malaysia and Indonesia are usually big recipients, but Vietnam, the Philippines, and even India, could see a lot more inflows too.
Others will be hard-pressed to tighten up as long as the BoJ is on a roll, he added.
At 5pm, the local currency was quoted at 3.0790/0820 against the greenback compared with 3.0825/0845 at the close on Wednesday.
According to Bloomberg, the ringgit held its sixth day of gains, rising 0.05 per cent to 3.0820 against the greenback.
Some foreign investment banks such as Barclays remain bullish on the ringgit and expect further appreciation in the run-up to the poll, likely at the end of April, given a likelihood of the incumbent party winning the election.
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"A victory by the incumbent BN (Barisan Nasional) would likely raise the prospect of a greater focus by the new government on the real economy, where growth is relatively broadly balanced, the current account surplus is rising and inflation is relatively benign," it said yesterday.
But it is not just the Malaysian election that is likely to affect the ringgit movement.
Bank of Japan's (BoJ) policy decision under its new governor Haruhiko Kuroda yesterday could help the ringgit offset the election uncertainty.
Its forex strategists Paul Mackel and Perry Kojodjojo are bullish on the ringgit, baht and peso, particularly against the Singapore dollar, which is more subjected to global risk.
"Ultimately, Japan's policy action should be good for the rest of Asia, but for now we see North Asian currencies maintaining their underperformance versus most of the South Asian currencies."
HSBC regional economist Frederic Neumann said with the BoJ move, liquidity will pour into regional financial markets already drowning in the stuff.
Thailand, Malaysia and Indonesia are usually big recipients, but Vietnam, the Philippines, and even India, could see a lot more inflows too.
Others will be hard-pressed to tighten up as long as the BoJ is on a roll, he added.
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