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Malaysia's currency expected to return to 4.1 against USD by year-end
Last Updated: 2017-08-16 09:53 | Xinhua
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Malaysia's currency ringgit, which has seen a good run this year, is likely to strengthen to 4.1 against the U.S. dollar by the end of this year, said a foreign exchange strategist on Tuesday.

Standard Chartered Bank's global research forex strategist Divya Devesh told the press during a briefing on the second half global outlook that he still has "overweight" recommendation on the ringgit, which is still seen as one the most undervalued emerging market currencies now.

He continues to see signs of improvement on the ringgit sentiment due to factors such as its attractive valuation, the light foreign investors positioning on the currency, and recent measures of the Malaysian central bank that have made the foreign exchange market more open.

Besides, the weaker outlook for the U.S. dollar in the second half is relatively positive on emerging market currencies.

"We think the fair value of ringgit against the U.S. dollar should be 4.1. As the current exchange rate is still low, we see room for ringgit to appreciate," Divya Devesh said.

He expects the ringgit to go back to 4.1 in the second half, and stabilize at that level throughout next year.

According to Bloomberg statistics, the ringgit has risen 4.28 percent against the dollar year-to-date.

Meanwhile, Standard Chartered Bank's ASEAN economic research head Edward Lee expects Malaysia's economy to grow at 5.4 percent in the second quarter.

"We expect the growth momentum to slow in the coming quarters as consumer spending and external demand may taper off during the remainder of 2017," he said.

Malaysia's economy grew 5.6 percent in the first quarter. The second quarter economic growth will be announced on Friday.

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