KUALA LUMPUR: The Malaysian ringgit is viewed to be trading at RM4.15 against the US dollar, as the declining Brent crude oil price is not supportive of it by the end of 2019.
Nevertheless, MIDF research firm as quoted in Bernama said the Federal Reserve’s rate cuts which would result in capital inflow to emerging markets, including Malaysia, the better fiscal position of the government and higher domestic demand resulting from an overnight policy rate (OPR) cut and steady economic growth, would help lend support to the ringgit.
In separate development, it said the OPR cut is expected to boost domestic demand.
MIDF Research said the 25 basis points OPR cut would continue to support both private consumption and investment in the second half 2019 (2H19).
Nevertheless, it said private consumption, particularly in the third quarter of 2019 is likely to be impacted by a higher base last year due to the tax holiday period, which ramped up household spending.
Hence, private consumption growth is forecasted to experience a trivial slowdown in 2H19 from 7.7 per cent year-on-year (y-o-y) recorded in first half 2019 and Bank Negara Malaysia is anticipated to maintain the OPR at 3.00 per cent in 2019.