KUALA LUMPUR – The ringgit is expected to trade higher next week as sentiment is likely to improve, supported by the tabling of the much-awaited 12th Malaysia Plan 2021-2025.
The plan, covering welfare, the income gap, social security and ongoing projects, will be presented in Parliament on Monday.
Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed has said the prolonged Covid-19 crisis has transformed the government’s spending pattern, which is now more focused on post-pandemic developments for the next five years.
A trader told Bernama that the United States Federal Reserve’s stance has made investors bullish, adding that risk-on sentiment may weigh on the greenback.
Given this, he said, the ringgit is likely to hover between 4.15 and 4.19 next week.
The Fed has signalled a more dovish view on the rate outlook, with many expecting a hike sometime next year.
Despite no changes made to the existing pace of asset purchases of US$120 billion (RM502.6 billion) per month for now, tapering may conclude in mid-2022.
Worries about China’s Evergrande Group’s debt also seem to be reducing, given the liquidity injection by monetary authorities.
The troubled company has been weighing on investor sentiment for most of the week, benefitting the US dollar.
“Investors will continue to monitor the struggling property developer’s development,” said the trader.
During the week, the ringgit was mostly lower against the US dollar.
On a weekly basis, the ringgit weakened to 4.1865/1890 vis-a-vis the greenback yesterday from 4.1700/1730 previously.
However, the local note traded mostly higher against other major currencies.
It improved slightly against the Singapore dollar at 3.0981/1004 yesterday from 3.0985/1010 a week before, and rose against the British pound to 5.7359/7393 from 5.7483/7525.
The ringgit was better against the euro at 4.9120/9150 from 4.9135/9170 previously, but depreciated versus the Japanese yen to 3.7925/7951 from 3.7913/7943. – Bernama, September 25, 2021
