The currency is expected to fall about 2.5% from Friday’s close to 4.55 per US dollar by end-March, according to the median forecast by strategists in a Bloomberg survey. Foreigners have sold US$761 million of local equities since the start of the year — more than the outflows seen for any other Southeast Asian country — further eroding demand for the ringgit.
The ringgit’s outperformance over the past year is set to be tested as the growth outlook of Malaysia’s largest trading partner further dims amid a trade war with the US.
US President Donald Trump’s initial 10% levy on all Chinese goods could jeopardise 0.9% of China’s gross domestic product, according to Bloomberg Economics estimates. That’s likely to hurt prospects for Malaysia’s trade-reliant economy and add to challenges for the ringgit, which is already under pressure from foreign selling of stocks and a stronger US dollar.
