Some good news among the bad, from MY Stock 118:
Malaysia’s oil exports have turned the ringgit into Asia’s best-performing currency even as analysts say it’s the least attractive.
Forecasters are predicting the ringgit will weaken 8.4 percent this year for the biggest drop in the region, and some of them even see it falling beyond a 17-year low reached in September. The bearish calls peaked around the end of January, when Swiss investigators said a probe into state-owned 1Malaysia Development Bhd. revealed about $4 billion may have gone missing.
The ringgit has confounded those calls by surging 9.7 percent this quarter, the most in 43 years.
“The ringgit is going to be one of the outperformers in the region in 2016,” said Divya Devesh, the Singapore-based foreign-exchange strategist for Asia at Standard Chartered Plc. “We are looking for a good rebound in oil prices. The market is still short ringgit so we might see continued covering of positions, which should also be supportive.”
As the Federal Reserve’s willingness to be gradual in raising interest rates drove emerging-market currencies toward their best month in 18 years, the ringgit came to the fore, reaching the highest in almost eight months of 3.9100 per dollar on Thursday.
Forecasters are predicting the ringgit will weaken 8.4 percent this year for the biggest drop in the region, and some of them even see it falling beyond a 17-year low reached in September. The bearish calls peaked around the end of January, when Swiss investigators said a probe into state-owned 1Malaysia Development Bhd. revealed about $4 billion may have gone missing.
The ringgit has confounded those calls by surging 9.7 percent this quarter, the most in 43 years.
Oil’s gains have been a big part of that — crude accounts for 22 percent of Malaysian government revenue and the nation is Asia’s only major net exporter — along with tax increases and spending cuts. Now 1MDB is adding to the upswing, with the state-investment fund agreeing to sell energy assets and pledging to repay 6 billion ringgit ($1.5 billion) of debt in the coming weeks.
“The ringgit is going to be one of the outperformers in the region in 2016,” said Divya Devesh, the Singapore-based foreign-exchange strategist for Asia at Standard Chartered Plc. “We are looking for a good rebound in oil prices. The market is still short ringgit so we might see continued covering of positions, which should also be supportive.”
As the Federal Reserve’s willingness to be gradual in raising interest rates drove emerging-market currencies toward their best month in 18 years, the ringgit came to the fore, reaching the highest in almost eight months of 3.9100 per dollar on Thursday.
Expect ProNajibs to go to town with the news.
Anyway hope the surge is long lasting and not just a ripple in the pond.
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