KUALA LUMPUR: The ringgit is Asia’s best performer so far this year, as the local currency benefits from solid foreign fund inflows into Bursa Malaysia and gains from oil exports.
The ringgit hit RM3.925 against the US dollar in early trade, its highest since August 11 last year, before strengthening to 3.908 as at 4.28pm.
The ringgit has confounded critics of Malaysia’s economic fundamentals by surging more than 9.5 per cent this quarter, the most in 43 years.
Former CIMB chief economist Lee Heng Guie told Business Times that the return of foreign funds is a signal that the market is expecting a slower US interest rate hike in the future.
Foreign funds had poured about RM4.4 billion into Malaysia’s equities this year, topping South Korea and Southeast Asian markets, according to MIDF Amanah Investment bank Bhd.
“Oil price is something that the market will continue to monitor, especially on the outcome of OPEC (Organisation of the Petroleum Exporting Countries) meeting in April,” Lee said.
A report by Bernama said at 9.11am today, the ringgit was quoted at 3.9250/9320 from 3.9385/9455 at 5pm on Wednesday.
The ringgit also traded higher against a basket of other currencies.
Against the Singapore dollar it rose to 2.9044/9117 from 2.9157/9215 on Wednesday and vis-a-vis the yen, improved to 3.4886/4951 from 3.5087/5159.
Against the British pound, the ringgit strenghtened to 5.6379/6487 from 5.6667/9776 and was better at 4.4451/4546 from 4.4580/4667 versus the euro.