KUALA LUMPUR (Sept 8): AmBank Research expects the ringgit expected to stay healthy versus the US dollar (USD) with its fair value between 4.12 – 4.15 against the USD, with its full-year average outlook at 4.33.
In an economic update today, AmBank group chief economist Anthony Dass said the decision to leave the overnight policy rate (OPR) unchanged at 3.00% by Bank Negara Malaysia (BNM) fell in line with his expectations.
“Also, we saw no changes to the statutory reserve requirement which is at 3.50%.
“In the policy statement, BNM remains upbeat on the growth prospects and confident over a moderate inflation outlook in 2H2017,” he said.
Dass reiterated his base case view of no rate hike in 2017 as BNM will continue to weigh between growth prospects and inflation.
He added that the room for the ringgit to stay firm remains, suggesting it should help ease pressure from import cost and limit the risk of potential transfer pricing.
“Meanwhile, we maintain our 45% chance for a rate hike in November by 25 basis points.
“This could happen if the gross domestic product continues to grow stronger and inflation becomes sticky downwards due to the pressure emanating from stronger demand pull as opposed to cost push,” he said.