KUALA LUMPUR – The current low value of the ringgit and other regional currencies is expected to remain volatile until the middle of December or when Donald Trump takes office in Washington on January next year.
According to an unnamed local analyst in the Star Sunday news report, the slump in currencies was due to the uncertainties Trump’s administration would bring when the latter is sworn in as the US president.
“We may have to wait until he officially takes office before the situation stabilises,” the financial analyst was quoted as saying.
Apart from that, the news report also pointed other global issues, such as a constitutional reform referendum in Italy on Dec 4, as among others that were impacting the currencies market.
“There is also pressure on China to raise the value of its currency which is now undervalued,” the analyst added.
Socio-Economic Research Centre executive director Lee Heng Guie said it was unknown as to how long the volatility might persist, adding that it was difficult to predict when the market would recover.
“The Ringgit’s volatility will remain for some time as investors’ sentiments are driven by expectations of Trump’s economic policies that may mean even a stronger greenback and higher US interest rates.
“What is important is for Malaysia to continue to address its economic vulnerabilities and strengthen domes¬tic fundamentals, backed by a strong reserve,” he was quoted saying in the news report.
The news article also reported Malaysians abroad as feeling the pinch as the ringgit dip further against the US greenback following the US presidential election.
As of this morning, the exchange rate was at RM4.41 for USD 1.