MIDF Expects Ringgit To Appreciate This Year

MIDF Amanah Investment Bhd (MIDF Research), MIDF’s research arm, is expecting the ringgit to perform better this year, thanks to the reversal of fund flows.

According to a research note from MIDF Reaserch,  the US Federal Reserve is expected to start cutting interest rates, which will narrow the interest rate differentials, which in turn will drive the reversal of fund flows.

This move will be beneficial to the ringgit in 2024.

Ringgit to appreciate to RM4.20

“We foresee the ringgit appreciating to RM4.20 at year-end in 2024. Despite the overall sluggish performance in 2023, we foresee the ringgit to rebound and appreciate in 2024. ,” said MIDF Research.

MIDF also added that China’s economic recovery will also be a boon for the ringgit, as it will be supported by a more vibrant regional trade performance.

However, there are several factors that can still hamper ringgit’s recovery, such as the possible risk of recession in the USA and a continued weakness in the global trade and manufacturing activities.

Challenging year for the ringgit in 2023

Ringgit faced a very challenging year in 2023, reaching the lowest point it has ever been since the Asian financial crisis in 1998.

Read More : Ringgit Falls To Lowest It’s Ever Been In 25 Years

In 2023, the Malaysian currency reached multiple low points, such as when it closed at a historic low of 4.794 against the US dollar in October, and closing at 3.527 to the Singapore Dollar in December.

At one point, Ringgit was the second worst performing currency in Asia, only behind the Japanese Yen.

Read More: Is The Ringgit In For Another Rough Year In 2024?