KUALA LUMPUR: The ringgit has been among the best regional performers to date, driven by the mix of favourable domestic and external factors.
Maybank Investment Bank Bhd (Maybank IB) group chief economist Suhaimi Ilias said the ringgit has stabilised and has been trading below 4.70 against the US dollar for almost two weeks.
Domestically, he noted that the government and Bank Negara Malaysia's efforts to stabilise the ringgit and rebuild reserves are underway, supported by government-linked companies.
"We do believe that the efforts by central bank to stabilise the ringgit and rebuild external reserves through repatriation and conversion are happening.
"When you look at the first quarter this year, the country's current account surplus improvement from the fourth quarter of last year was largely driven by the higher inflows of investment income.
"This strongly suggest that Malaysian corporates are actually responding positively to efforts by the government to encourage repatriation and conversion," he said in a media briefing on the market outlook of the second half of 2024.
He said Maybank IB is seeing the market pricing in the US Federal Reserve (Fed) to cut interest rates as early as September.
Suhaimi expects Bank Negara to maintain overnight policy rate at 3.0 per cent, given that inflation may aerage at 2.4 per cent in 2024 and 3.0 per cent next year.
"The dynamics on interest rates between the two central banks should be further supportive of the ringgit. We anticipate the ringgit to end this year at 4.60 against the greenback," he added.