Potential to reach RM3.75? As usual, it SHOULD depend on trade.

The following was said by Standard Chartered Bank chief economist for Asean and South Asia Edward Lee. “US dollar is generally still overvalued and in Asia, the ringgit is one of the currencies that is undervalued against the US dollar.”  He is a chief economist for a world renowned bank.  Here’s that Full article in FreeMalaysiaToday (FMT) here. With regards to his view, I shared a some views much earlier. An earlier article in July 2015 here. “Ringgit is undervalued. I agree. “ By the way, the country is certainly growing stronger and not about to go bankrupt. Yes, the article and even this latest assessment came from a little me.

Here’s that assessment from Bank Negara Malaysia just days ago. “In 2017, the Malaysian economy recorded a robust growth of 5.9% (2016: 4.2%), supported by faster expansion in both private and public sector spending.” As for 2018, this is their assessment. “Amid the stronger global economic conditions, the Malaysian economy is projected to grow by 5.5% – 6.0% in 2018. Domestic demand will continue to be the anchor of growth, underpinned by private sector activity.” Here’s that full report for download. Reminder, this is the BNM report and not some government report or some politician’s assessment.

Coming back to the FMT article.  The ringgit is expected to reach between 3.70 and 3.75 against the US dollar in the second half of the year on the back of the country’s solid economic fundamentals. Lee said, “We have seen a period when the emerging markets did not do so well because of the economic fundamentals.  Now the emerging markets are back to being positive and, in that sense, it is positive for emerging markets’ assets.” About the ringgit, he said, “Based on our estimation, the US dollar is generally still overvalued and we feel that in Asia, the ringgit is one of the currencies that is undervalued against the US dollar.” When it comes to the trade war, Lee shared that it is not all gloom because Malaysia may even see some positive spillover from it. He said, “In terms of some of the key exports from China to the US, you can see Malaysia as being one of the key exporters as well.”

All the best to all the developers yeah since I think everything has slowed down with the anticipation of the upcoming General Election.  It may seem to many that it’s not the best time for any new launchings but actually when the right target market is given a choice which is at the right price, the better ones would usually make the right decision. This is the reason why property investors would continue investing while the waiting ones would continue waiting. Funny world but always true not just in Malaysia but everywhere around the world. Happy following and investing. Voting too!

written on 31 Mar 2018

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