Ringgit surges to 4.06 against dollar

KUALA LUMPUR, Dec 4 — Strong export forecast for October, firm crude oil prices, expectation of an Overnight Policy Rate (OPR) hike in January and higher foreign buying of equities were among the factors that boosted the local currency to close at its highest level in 14 months, dealer said.

At 6pm, the local unit ended 275 basis points better at 4.0675/0725 against the greenback, a level last seen on Sept 9, 2016.

Oanda Corp Head of Trading for Asia Pacific Stephen Innes told Bernama that investors remained positive of the ringgit as encouraging global growth provided a boon to domestic exports.

A Reuters poll, released today, revealed that Malaysia’s October exports were expected to expand 18.5 per cent, year-on-year (y-o-y), from 14.8 per cent, y-o-y, in September, mainly lifted by the robust demand in th manufacturing sector.

Besides, Innes said crude oil prices, which saw the benchmark Brent crude oil hovering above US$63 per barrel, continued to support the ringgit.

“The extension of output cuts by the Organisation of Petroleum Exporting Countries’ (OPEC) underpinned crude oil prices,” he said, adding that the local note would continue to benefit from a spike in the OPR following Bank Negara Malaysia’s hawkish note in its recent monetary policy statement.

Meanwhile, a dealer said higher foreign buying was noted in the local equity market and this automatically drove demand for the ringgit as Bursa Malaysia was traded in the local currency.

The local equity market had seen the re-entry of foreign funds, since November, which soared to RM273.3 million last week from RM88.6 million in the previous week.

Many economists believed the ringgit, which was undervalued for a while, had begun to recover lost ground since September and rebounded strongly compared with its regional peers. — Bernama

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