KUALA LUMPUR (Aug 8): RHB Research Institute Sdn Bhd expects the ringgit (MYR) to recover gradually over time, as it has overshot on the downside from its fundamental value.

In an economic update today, the research house said Malaysia’s forex reserves rose by US$500,000 to US$99.4 billion as at July 31.

It said this was mirrored by the foreign inflow of funds into the equity markets during the month.

“In MYR terms, the country’s forex reserves increased by RM2.2 billion to RM427 billion over the same period.

“MYR strengthened in July and remained stable in the first week of August as the US Federal Reserve (US Fed) maintained interest rates on 26 Jul, while reiterating a slightly dovish tone.

“We, however, expect MYR to recover gradually over time, as it has overshot on the downside from its fundamental value,” it said.