Wednesday March 6, 2013
Ringgit beyond 3 per US$ by year-end
KUALA LUMPUR: Malaysia's ringgit may strengthen beyond 3 per dollar by year-end for the first time since March 2012, led by a recovery in the Chinese and US economies, according to CIMB Group Holdings Bhd.
China, Malaysia's second biggest export market, maintained a 7.5% growth target for 2013, Premier Wen Jiabao said in his final opening address in Beijing at the annual meeting of the National People's Congress.
The United States is expanding at a “moderate if somewhat uneven pace,” Federal Reserve Chairman Ben S Bernanke said in testimony to the senate banking committee on Feb 26.
The ringgit has dropped 1.3% this year and reached a five-month low in February on concern Prime Minister Datuk Seri Najib Razak will lose support in national elections that have to be held before the end of June.
Some analysts in a Bloomberg survey are also predicting the ringgit will strengthen beyond 3 per dollar by Dec 31. Thirteen of 28 see the currency breaking through that level. The most bullish is Swiss bank UBS AG, which is forecasting 2.8.
“We think the underlying real economy in China and the United States will be much better in 2013, compared with the last two years.”
The ringgit appreciated 0.3% to 3.0993 per dollar as of 12:58 pm in Kuala Lumpur, according to data compiled by Bloomberg. It touched 3.1265 on Feb 1, the lowest level since Sept. 3, 2012.
Najib's Barisan Nasional coalition has ruled Malaysia since independence in 1957. He has to dissolve parliament by April 28 in preparation for the poll.
His approval rating fell to 61% in February, from 63% at the end of December, according to a survey from the Merdeka Center for Opinion Research issued on Feb 26.
The FTSE Bursa Malaysia KLCI Index of equities has lost 2.8% this year, the ninth-worst performance of 94 benchmark indexes tracked by Bloomberg. The nation's exports contracted 5.8% in December, the biggest drop since September 2009, the latest data from the statistics office shows. January figures are due on March 11. - Bloomberg