KUALA LUMPUR: The ringgit will remain Asia's outperformer in the second half of this year, according to Standard Chartered (StanChart).
The local note is the only regional currency that has appreciated against the US dollar year to date, the bank said.
StanChart expects the ringgit to trade against the greenback at 4.66 and 4.55 by the end of 2024 and 2025 respectively.
At the opening today, the ringgit marginally increased 30 basis points to 4.5645/5725 against the greenback from Thursday's close of 4.5675/5710, continuing its 10-day rally as investors anticipated possible Federal Reserve (Fed) rate cuts in September.
StanChart said the authorities' engagement with relevant bodies to encourage repatriation, convert and hedge their foreign currency proceeds has been the trigger for the ringgit outperformance.
"But we note that underlying fundamentals have also been ringgit-positive," it added.
This includes low foreign positioning in Malaysia, high resident offshore positioning, monetary policy divergence (where Malaysia may be the only regional bank more likely to hike than cut) and a continued tourism recovery.
"That said, we note that the ringgit has recovered significantly in a short period and potential reserve rebuilding may moderate further rallies on a relative basis.
"The US election outcome may also bring some risk to the currency, particularly on any harsh tariff actions on China," StanChart said.