(Bloomberg) -- Malaysia’s ringgit is set to notch its longest streak of gains in more than 17 months as traders bet the nation’s interest-rate gap with the US will narrow.
The ringgit rose as much as 0.5% to 4.6630 per dollar on Friday, set for a seventh day of gains, which would be its longest winning streak since January 2023. It is now at the highest since January this year.
The rally comes as Bank Negara Malaysia signaled it’s unlikely to ease policy in the near term while traders ratcheted up bets for cuts in the US, with the first as early as September. The rebound in exports and earlier efforts by the central bank to encourage investment firms to repatriate earnings onshore have catapulted the currency to among the best performers in Asia this year.
“The ringgit has turned more resilient than peers following increased engagement from BNM with government linked companies to encourage conversion of foreign-exchange proceeds,” said Moh Siong Sim, a currency strategist at Bank of Singapore in Singapore. “With manageable inflation and better growth prospects, we expect BNM to maintain a prolonged hold for its policy rate at 3% through 2025.”
Malaysia Holds Key Rate, Weighing Risks From Subsidy Cuts
Malaysia’s rate outlook stands in contrast to peers like the Philippines, where the central bank governor has said cuts may begin in August. The ringgit still faces risks including the weak Chinese yuan, Moh said.
--With assistance from Anisah Shukry and Netty Ismail.
©2024 Bloomberg L.P.
