Friday May 19, 2006
StanChart CEO: Economy to stay robust
KUALA LUMPUR: Malaysia's economy is expected to remain robust despite rising inflation rates, Standard Chartered Bank Malaysia Bhd (Stanchart Malaysia) chief executive officer Shayne Nelson said.
He said the bank had revised its gross domestic growth (GDP) forecast for Malaysia this year to 5.5% from 5% previously.
“The government’s control of the economy plus the central bank’s control on interest rates and inflation have been promising,” he said at the bank's economic seminar yesterday.
Stanchart also sees Bank Negara's overnight policy rate (OPR) reaching 4% by July. “With Bank Negara having an inflation forecast of 3.5% to 4% for 2006, we are optimistic that OPR will reach 4% by July.”
“This will bring our real interest rate to zero. In August, we forecast perhaps another 25 basis-point increase depending on inflation,” he said.
Stanchart global research economist Joseph Tan said the ringgit was expected to appreciate to 3.52 against the greenback by the end of this year.
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From left: Stanchart economist, global research economist Joseph Tan, Stanchart Malaysia chief executive officer Shayne Nelson, Stanchart Malaysia head of global markets Daniel Koh and Stanchart regional head of research (North East Asia), Nicholas Kwan at the media briefing on Wednesday. |
He said while the ringgit had strengthened against the dollar, it had not appreciated significantly against regional currencies.
Stanchart Malaysia head of global markets Daniel Koh said there had been great volatility in the currency markets and interest rates of late.
“There is a lot of interconnectivity in markets these days. What happens in the regional markets indicates what happens here,” he said.
He said although the ringgit was expected to continue appreciating, there would be volatility.
“The overall trend will continue but it will not be 'one way' as before,” he added.
On regional markets, Stanchart regional head of research (North East Asia), Nicholas Kwan, said they were on an up trend, based on strong first quarter GDP growth in China, Singapore and Hong Kong.
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