Ringgit expected to trade in volatile mode next week
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Loading... - Yasmin Lau
- 02 May 2023
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The ringgit is expected to endure more volatility next week amid uncertainties surrounding the market and ahead of Bank Negara Malaysia’s (BNM) monetary policy committee (MPC) meeting on the overnight policy rate (OPR) on May 2 to 3.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said it has been quite volatile for the currencies market this holiday-shortened week.
The fall in the First Republic Bank (FRB) share prices, the United States (US) debt ceiling debate as well as the US first quarter 2023 (Q1 2023) Gross Domestic Product print which grew slower than expected at 1.1 per cent from 2.6 per cent in the preceding quarter, has led the risk-off mode to seep in, he told Bernama.
He noted that the sharp decline in investment by 12.5 per cent was the primary reason for slower growth which coincides with the aggressive interest rate hike by the Federal Reserve (Fed).
Major central banks such as the Fed and the European Central Bank will reconvene to decide the policy rates next week.
“Should they push forward with the interest rate hike, it might lead to slower labour hiring as businesses would become mindful of the economic outlook and how it might affect their profitability.
“We believed there could be a chance that the Fed might become dovish in its economic assessment. In that case, the ringgit could post a slight appreciation next week, possibly around RM4.45.
“As for BNM, we foresee it might want to keep the OPR steady at 2.75 per cent as heightened economic uncertainties warrant for a status quo in the policy rate,” he added. Read More…
