Malaysia’s Currency Shines Amid Global Trends
- Ringgit outperforms Asian peers due to investment inflows and easier Fed policy
- 14% appreciation of ringgit against the dollar this quarter
- Dollar at its lowest intraday level since June 2021
- Special individual income-tax rate for Malaysians and knowledge workers in Johor’s Forest City
- Malaysia attracting investors, generating support for ringgit
- Key level to watch: 4.0500 ringgit
- Potential extension of decline to 4.0000 ringgit if dollar falls below 4.0500
The Malaysian ringgit has been performing exceptionally well compared to other Asian currencies, primarily due to the loosening of US Federal Reserve policy and increased foreign investment inflows. Regional currencies have generally strengthened against the dollar, aided by the beginning of the Fed’s easing cycle with a larger-than-expected rate cut last week, as well as growth in Asia and gains for the Chinese yuan. The ringgit has appreciated 14% against the dollar this quarter alone. The dollar recently fell 0.6% to 4.1295 ringgit and reached its lowest intraday level since June 2021 at 4.1100 ringgit. Last week, Malaysia’s Second Finance Minister Amir Hamzah Azizan announced incentives for the launch of Johor’s Forest City as a Special Financial Zone, including a special individual income-tax rate of 15% for Malaysians and knowledge workers. These measures aim to attract capital to the $100 billion development and expand its investor base. Maybank’s Head of FX Research, Saktiandi Supaat, stated that Malaysia is in a prime position to draw investors, which is significantly bolstering the ringgit. The dollar’s recent weakness, along with China’s latest stimulus measures like the People’s Bank of China’s policy-rate cuts and a stronger yuan, have also supported the ringgit. According to Supaat, a key level to monitor is 4.0500 ringgit; if the dollar falls below this point, it could lead to an extension of the decline to 4.0000 ringgit. However, he cautions that the dollar may rebound due to its significant weakening against the ringgit.
Factuality Level: 8
Factuality Justification: The article provides accurate and objective information about Malaysia’s ringgit outperforming its Asian peers due to various factors such as U.S. Federal Reserve policy, foreign investment inflows, regional currencies strengthening against the dollar, and incentives for investors in Johor’s Forest City. It also includes expert opinions from Maybank’s Head of FX Research, Saktiandi Supaat, on potential future movements of the ringgit.
Noise Level: 3
Noise Justification: The article provides relevant information about Malaysia’s ringgit outperforming its Asian peers and offers insights from an expert on the factors contributing to this performance. However, it lacks a comprehensive analysis of long-term trends or possibilities, accountability, and actionable insights for readers.
Public Companies: Maybank (MAYBANK)
Key People: Amir Hamzah Azizan (Second Finance Minister), Saktiandi Supaat (Head of FX Research at Maybank)
Financial Relevance: Yes
Financial Markets Impacted: Malaysian Ringgit and U.S. Dollar
Financial Rating Justification: The article discusses the performance of the Malaysian Ringgit in relation to the US Dollar, which is a financial topic, and also mentions the impact on financial markets as it talks about the Federal Reserve policy, foreign investment inflows, and the potential for further decline in the value of the U.S. Dollar.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no mention of an extreme event in this article.
Move Size: 14%
Sector: All
Direction: Up
Magnitude: Large
Affected Instruments: Stocks, Bonds, Commodities
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