Malaysian ringgit could drive past 4.55 by the end of first quarter

Economy - Mohit Shah - Jan 03,2017

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malaysian ringgit could drive past 455 by the end of first quarter

According to a Westpact analyst, the Malaysian ringgit would weaken during the January-March quarter in comparison to dollar.

The currency pair bartered at 4.48 on Tuesday morning. As per the reports of last month, the ringgit dropped to its lowest level since the 1998 Asian Financial Crisis and also for the full year of 2016; the currency tumbled 4.24 percent against the dollar.

There are strong speculations that the Malaysian ringgit could further weaken in the January-March quarter due to a combination of external dangers and domestic issues linger over the plagued currency, as per the Westpac analyst.

Robert Rennie, global head of market strategy at Westpac revealed on Tuesday that "Expectations are for slower China through 2017, that's something that weighs on Malaysia clearly."

Rennie also stressed on the assumption that, the ringgit will move up to 4.55 against the dollar by the end of first quarter in 2017.

The domestic political issues are one of the key factors which would likely make the currency more vulnerable this year.

The ongoing scandal in the nation involves the state development fund 1Malaysia Development Berhad (1MDB) which could rattle up the investor confidence, among a series of current global investigations into allegations stating that billions of dollars were robbed from the fund.

This long-running scandal involved allegations that redirected funds flowed to Najib Razak's (Malaysia's Prime Minister) personal account and also to his stepson, Riza Aziz.

Robert Rennie further highlighted a rise in U.S. yields could lead to a mounting pressure over advancing Asia.

On the other hand, HSBC's MD and co-head of Asian economic research, Frederic Neumann, told a news agency on Tuesday that, Malaysia's diminishing current account surplus is expected to make the ringgit more sensitive this year.