Malaysian Ringgit's FV Should Be RM4.20 To US Dollar Based On Current Economic Fundamentals - MIER

KUALA LUMPUR, April 18 (Bernama) -- The Malaysian Institute of Economic Research (MIER) estimates the Malaysian ringgit’s fair value (FV) based on economic fundamentals to be at RM4.20 to the US dollar. At 9.03 am Tuesday, the Malaysian ringgit was traded at 4.4070/4120 against the greenback, down from the 4.4030/4060 recorded at 6 pm on Monday. Senior Research Fellow Dr Zulkiply Omar said the value is based on the strength of the economy and the demand for Malaysian ringgit as exports grow in tandem with the global economic growth. “However, the undervalued trading of the Malaysian ringgit is currently influenced by sentiment which is also a factor of currency volatility. "Sentiment normally influences the ringgit through capital flow. Every time something happens, economically related or whatever the factor, the sentiment influences people and their decision to move capital in and out of the country," he added. He told reporters this at MIER’S 22nd Corporate Economic Briefing here Tuesday. Zulkiply said Malaysia's central bank, Bank Negara Malaysia's measures to clamp down on the ringgit non-deliverable forward (NDF) trades and aimed at curbing speculative activity on the offshore market in November last year, helped reduce volatility in the Malaysian ringgit. Going forward, he said the Malaysian ringgit is expected to improve in line with the global economy. "The World Bank and International Monetary Fund expect world demand this year to grow when compared to last year. "So, (our) expectation is that, Malaysia’s exports will increase and influence demand for the ringgit, which is expected to improve in turn," he added. -- BERNAMA