KUALA LUMPUR: The ringgit is expected to strengthen between RM3.20 and RM2.50 against the US dollar over the next two to five years, supported by trade surplus and government efforts to ensure steady economic growth.
Affin Hwang Asset Management Bhd (Affin Hwang AM) managing director Teng Chee Wai said currently, the ringgit is among the currencies that are performing well against regional currencies as Malaysia still has a huge trade surplus.
He said the trade surplus reflected the country’s more diversified economy.
“Looking at the trade surplus and the government’s ongoing efforts, it is expected to generate growth in the future.
“This will contribute to the strengthening of the ringgit. The ringgit is expected to strengthen to RM3.20 over the next three to five years,” he said at the Affin Hwang AM Investment 2018 in Kuala Lumpur on Saturday.
Also present, Deputy Minister of International Trade and Industry Dr Ong Kian Ming.
Teng said the expectation is based on the ringgit’s movement after the 13th General Election (GE13) in 2013, when the ringgit strengthened to an average of RM3.10 to RM3.20.
“During the GE13, the ringgit hovered at RM3.10 to RM3.20 against the US dollar, but it declined when it hit the global oil crisis.
“The situation worsened after the emergence of th scandal involving 1Malaysia Development Bhd (1MDB) in 2015 and some other issues, but investors confidence on Malaysia are improving,” he said.
Commenting further, Teng said to ensure the ringgit strengthens in the future, the government should prioritise foreign direct investment (FDI).
“The government should prioritise FDI and not focus too much on market feedback.
“If the government continues to reassure foreign investors, the ringgit will receive a positive impact and continue to strengthen,” he said.