MIDF has revised its year-end target for the ringgit to RM4.45 as it said it expects the local currency to appreciate towards
the end of the year, however, given the series of external developments keeping ringgit from strengthening further, the house revise its year-end target from RM4.30 to RM4.45.
The broking house said it foresees the local currency will benefit from no further widening of the OPR-FFR as OPR is expected to be maintained at 3.00% even going into 2024, with Fed will also keep fed funds rate unchanged at current high levels. Economic fundamentals also remain supportive to ringgit as domestic demand continues to make up for the weakness in the external trade.
Nevertheless it said the signs of continued recovery in China pointed to improving external trade outlook, in addition to the turnaround in E&E exports. While we are optimistic for the ringgit to strengthen further, we are cautious of the downside risks such as growth concerns, including the escalation of conflicts in the Middle East and a drag from slow recovery in China, and renewed expectations for rate hike by the Fed; which could lead to higher demand for US dollars and on the other hand cause ringgit to remain weak.
