KUALA LUMPUR: Standard Chartered Bank Research has maintained its view that the ringgit will remain the region's outperformer, noting that it is the only Asian currency that has appreciated against the US dollar, year-to-date.
In a research report "Malaysia - Outperformer", its research department opined that the authorities’ engagement with relevant organisations to encourage repatriation, convert and hedge their foreign currency proceeds has been the trigger for this outperformance.
Moreover, it said underlying fundamentals have also been ringgit-positive including low foreign positioning in Malaysia, high resident offshore positioning, monetary policy divergence with Malaysia’s central bank likely to hike rather than cut in the region, and a continued tourism recovery.
"That said, we note that the ringgit has recovered significantly in a short period and potential reserve rebuilding may moderate further rallies on a relative basis," it said.
However, it said the United States election outcome may also bring some risk to the local currency, particularly harsh tariff actions on China. - Bernama
