Moody’s poll: Ringgit to remain stable over next 12 months

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KUALA LUMPUR: The Malaysian ringgit has improved significantly and the currency will show stability against the US dollar over the next 12 months, according to a poll conducted by Moody’s Investors Service.

The just-released report titled “Malaysia-Inside ASEAN: The View from Malaysia”, discusses results from real-time polls conducted during Moody’s annual Inside ASEAN-Spotlight on Malaysia briefing held here, recently.

The credit rating agency said the broad view on the ringgit among market participants showed that 53 per cent of respondents expected the local unit to consolidate in a range of 4.00-4.20 against the greenback over the next 12 months.

“Roughly a third expect a mild appreciation, within a range of 3.50-4.00 per dollar,” Moody’s said in a statement today.

It said the recent let-up in dollar appreciation, together with an improvement in Malaysia’s trade surplus and foreign exchange reserve position, provide a reasonably supportive backdrop for the ringgit.

However, it said even if the ringgit were to remain weak or embark on a renewed depreciatory trend, the overall exposure of Malaysia’s sovereign and banks to foreign exchange risks would remain manageable.

“The predominance of funding in the local currency means that weakness in the ringgit has not led to increased debt distress in the corporate and banking sectors and the knock-on impact on interest rates has remained muted,” said the rating agency.

The event brought together the country’s largest investors, intermediaries and debt issuers, with 110 market participants in attendance. — Bernama