Malaysian Ringgit May Climb on Growth Optimism, Survey Shows

The Malaysian ringgit may extend this year's 3.6 percent advance as traders bet the central bank will permit more gains as the economy shows signs of expansion.

Among 14 investors, strategists and traders surveyed from Singapore to Seoul on July 6, nine recommended buying the ringgit, the most bullish of any of the seven regional currencies. Four advised selling it and one said to hold it.

The ringgit completed a second winning week in the five days through July 7 as reports showed exports and industrial production rose in May at the fastest pace in three months. Stocks also climbed the past three weeks as Southeast Asia's third-largest economy grew at a faster-than-expected 5.3 percent pace in the first quarter from a year earlier.

"Fundamentals are very supportive for the currency and it's going to remain that way,'' said David Mann, a foreign- exchange strategist in Hong Kong at Standard Chartered Bank Plc. "Overall economic performance is very good and authorities in Malaysia are allowing the currency to appreciate.''

The ringgit was at 3.6550 per dollar late July 7 in Kuala Lumpur, according to Bloomberg data. Standard Chartered predicts the ringgit will strengthen to 3.57 this quarter and 3.52 by year-end.

Malaysia scrapped a seven-year peg of 3.80 to the dollar July 21, 2005, in favor of a managed float against a basket of undisclosed currencies of its key trading partners, the same day China revalued. Central Bank Governor Zeti Akhtar Aziz June 6 said the economy will probably expand 6 percent this year as demand for the nation's exports remains strong.

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