Positive Shift for Ringgit in May-24

In May 2024, the US dollar saw a notable decline, ending four consecutive months of appreciation. The DXY Dollar Index closed at 104.67, down 1.5% from the previous month’s close of 106.22. Similarly, the monthly average fell by 0.4% to 104.95.

Conversely, the Malaysian ringgit experienced a rebound, appreciating by 1.4% in May 2024 to close at RM4.707 by month-end. This turnaround follows several months of declines. The MIDF Trade-Weighted Ringgit Index (TWRI) also surged by 1.0% to 86.11 during the same period.

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Positive Shift for Ringgit

Analysts anticipate the ringgit to average around RM4.53 for the year, with a trend towards RM4.43 by year-end. However, downside risks such as geopolitical tensions and weaker growth in China could limit its strengthening potential.

Despite these challenges, the MIDF TWRI is expected to reflect a broad appreciation of the MYR, with projections indicating an end-of-year index of 91.50, compared to 85.34 at the end of 2023.

“We anticipate an average of around RM4.53 in 2024 (2023: RM4.56) and a trend towards RM4.43 by year-end (end-2023: RM4.59). However, several downside risks could limit the chances for ringgit to strengthen (rising geopolitical tensions, delay in Fed’s rate cuts, weaker growth in China, etc)

“We anticipate our MIDF TWRI to reflect a broad appreciation of the local currency, projecting the index to end the year higher at 91.50 (end-2023: 85.34),” says MIDF.