KUALA LUMPUR (April 6): UOB Group said today it expects investment flow to pick up post-Malaysia's 14th general election (GE14) and support the ringgit's strength further. UOB maintained its year-end US dollar-ringgit exchange rate forecast at 3.8000.
At 1:15pm, the ringgit was traded at 3.8705 against the US dollar. Over the last one year, the exchange rate was between 3.8533 and 4.4415.
UOB maintained its US dollar-ringgit exchange rate forecast following Prime Minister Datuk Seri Najib Tun Razak's announcement today that Malaysia's Parliament will be dissolved tomorrow (April 7, 2018) to make way for GE14, which is expected to be held within 60 days after the dissolution.
UOB senior economist Julia Goh wrote in a note today: "The specific election date has not been announced but speculation is that it would be early May, just before Ramadhan starts in mid-May. The ruling coalition is widely expected to win the election. Key to watch is whether the incumbent government can retain 59% of the country's parliamentary seats currently held or even regain two-thirds majority that it lost since the 12th General Election in 2008."
"Assuming no surprises in the coming election, this provides medium-term policy certainty particularly on infrastructure development, implementation of the recently signed Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) trade deal, and fiscal consolidation. The unfolding global trade tensions remain a risk albeit we continue to hold the view that there remains room for negotiation over the next 60 days before the tariffs can go into effect," Goh said.