KUALA LUMPUR, July 13 — The Malaysian ringgit surged to its highest level against the US dollar in six months, buoyed by expectations of an impending interest rate cut in the US as inflation stabilises. Early this morning, the ringgit reached 4.6630, its best performance since the start of the year, outpacing other regional currencies such as the Chinese yuan and Indonesian rupiah. According to The Edge Markets, the Australia and New Zealand Banking Group (ANZ) highlighted that this development augurs well for Malaysia’s trade balance.
“Firstly, we expect the goods trade surplus to rise in a sustainable manner,” ANZ noted. “Secondly, we anticipate a narrowing of the deficit on the financial account, owing to higher net foreign direct investment flows.” However, the bank emphasized that these benefits depend on the ringgit maintaining its gains. US Federal Reserve chairman Jerome Powell recently hinted at potential interest rate cuts to pre-empt further declines in inflation, which markets interpreted as a sign of forthcoming reductions.
