KUALA LUMPUR, Sept 27 — The ringgit snapped four days of losses to end the week firmer against the US dollar after index provider FTSE Russell decided to maintain Malaysian bonds on its fixed-income watchlist.
At 6pm, the local note closed at 4.1860/1900 against the greenback, improving 70 basis points from Thursday’s close of 4.1930/1980.
FXTM market analyst Han Tan said the ringgit had weakened alongside most Asian currencies for the week, as risk aversion fuelled the stronger US dollar narrative.
“The decision by FTSE Russell to keep Malaysian bonds on its benchmark World Government Bond Index (WGBI) is supportive of the ringgit in the interim,” he told Bernama.
However, Tan said the risk of expulsion lingered on, as investors continued to eye how else policymakers might improve market liquidity and accessibility.
At the close, the ringgit also traded higher against other major currencies.
It rose against the Singapore dollar to 3.0292/0325 from 3.0347/0392 on Thursday and advanced against the Japanese yen to 3.8774/8818 from 3.8958/9011 yesterday.
Vis-a-vis the euro, the local unit strengthened to 4.5732/5793 from 4.5842/5914 while against the British pound, it improved to 5.1433/1499 from 5.1658/1736 yesterday.
Meanwhile, in a note today, MIDF Amanah Investment Bank Bhd Research (MIDF Research) said news that Malaysia bonds stayed on FTSE Russell’s watchlist had provided positive sentiment to the ringgit, despite a further update of the watchlist to be provided in the next interim review in March 2020.
Therefore, it expected the local note to gradually appreciate against the greenback towards the end of the year.
The research firm said the estimate would also be supported by the expansionary Budget 2020 to be announced on Oct 11, coupled with the resumption of US-China trade talks from Oct 10-11, which would slightly calm the ongoing tensions.
“Factoring all that, we foresee the ringgit trading at 4.15 versus the greenback by end-2019.
“Similarly, we also expect the local note to average at 4.15 against the US dollar for 2019,” it said, adding that year-to-date, the ringgit averaged at 4.13 against the greenback. — Bernama
