Weak ringgit will boost foreign investment in Malaysia, forex broker says

FXTM chief market analyst Jameel Ahmad speaks at a media briefing in Kuala Lumpur on April 14, 2015. — Picture by Boo Su-Lyn
FXTM chief market analyst Jameel Ahmad speaks at a media briefing in Kuala Lumpur on April 14, 2015. — Picture by Boo Su-Lyn

Follow us on Instagram and subscribe to our Telegram channel for the latest updates.


KUALA LUMPUR, April 14 — The weak ringgit will encourage international investment in Malaysia and likely boost demand for Malaysian exports, an international forex broker said today.

FXTM chief market analyst Jameel Ahmad noted that Malaysia's economy is not very reliant on oil exports, amid plunging oil prices and the weakening of the ringgit to a six-year low against the US dollar.

"Investors will be more encouraged to purchase from Malaysia — manufacturing, property, setting up an overseas business," Jameel told a media briefing here.

"They'll see Malaysia as an attractive destination," he added, noting also that Malaysia has a highly-educated workforce conversant in English.

Jameel also noted that manufacturing represents 77 per cent of Malaysia's exports and that although Malaysia's economy is linked to commodity prices, data shows that commodities comprise 22 per cent of exports.

"External international investment, improvement for foreign direct investment are positive for the economy, as well as diversifying economic output," he added.

The broker predicted a more cautious response from the US Federal Reserve amid expectations that it will raise interest rates, which will further pressure the ringgit due to dollar demand.

"I personally expect the first US interest rate rise in September," said Jameel.

"There's a risk of dollar profit-taking. So even if the Federal Reserve does raise interest rates, I'm keeping a close eye on the statement," he added.

The broker also said he saw the floor price for oil as US$42 (RM156), cautioning that it could fall however if there is an oversupply.

Bloomberg reported last January that Prime Minister Datuk Seri Najib Razak has reduced Malaysia's growth forecast for this year to 4.5 per cent to 5.5 per cent from 6 per cent earlier due to the oil plunge.

You May Also Like

Related Articles