KUALA LUMPUR – The ringgit is expected to further appreciate against the United States dollar next week, as investors maintain their focus on the progress of the Covid-19 vaccination programme.
“The ringgit could appreciate further to reach RM4.03 to the US dollar next week if there are positive developments regarding the vaccine roll-out,” Bank Islam Malaysia Bhd economist Adam Mohamed Rahim told Bernama.
“Otherwise, the extension of the movement control order (MCO) should prevent an appreciation, and perhaps, lead to a weakening.”
The national vaccination programme will start next month, with a testing capacity of 150,000 shots a day targeted by the middle of the year.
Prime Minister Tan Sri Muhyiddin Yassin on January 11 said Malaysia is expected to receive its first Pfizer vaccines by end-February.
Adam said the progress of US President Joe Biden’s proposed US$1.9 trillion (RM7.7 trillion) relief package will be closely monitored next week, as it could help lift sentiment towards emerging currencies, including the ringgit.
“It will definitely influence sentiments in the local market, as a stimulus could boost consumption and demand for goods outside of the US, and later on, positively affect exports.”
This week saw the ringgit starting off on a weak note due to the extension of the MCO, weaker crude oil prices, the rising number of Covid-19 cases globally, and delayed vaccine roll-outs.
The currency rebounded on Wednesday following gains in crude prices, as well as the International Monetary Fund’s bullish global economic outlook.
The local currency ended the week firmer against the greenback as Moody’s Investors Service’s affirmation of Malaysia’s local and foreign currency long-term issuer ratings at A3, with a stable outlook, helped boost risk appetite in the market.
On a Friday-to-Friday basis, the ringgit was higher against the US dollar at 4.0400/0450 versus 4.0415/0445 the previous week.
It also appreciated against the Singapore dollar to 3.0369/0416 from 3.0451/0485 a week earlier, and strengthened against the yen to 3.8524/8575 from 3.8984/8021.
The ringgit rose against the British pound to 5.5207/5291 from 5.5231/5288 a week earlier, and was firmer against the euro to 4.8945/9021 from 4.9197/9246 previously. – Bernama, January 30, 2021
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