RAM Ratings: Ringgit unlikely to touch RM4 to a Dollar

Economist and Head of Research Kristina Fong said there were a lot of external uncertainty which was fueling the volatility in the ringgit.

"The majority of the movement in the ringgit in the past year has been non fundamental and very sentiment-based.

"As these uncertainties unfold and conditions improve, this will help ease the downward pressure on the local currency," she told reporters after presenting her views on the economic outlook and the impact of the exchange rate volatility here today.

The half-day talk, organised by Malaysia External Trade Development Corporation (Matrade), was aimed at creating more awareness on the impact of exchange rate volatility on local exporters.

She said the ringgit has been averaging at 3.68 this year and RAM Ratings expected the local note to end the year at an average of between 3.70 and 3.80 against the greenback.

When asked whether Bank Negara Malaysia would consider pegging the ringgit, Fong said RAM Ratings did not believe this was the monetary plan.

"Malaysia is more open now. The last time we had the pegging, the economy was in a different situation all together. Now we have more foreign investments and more foreign participation," she said.

On Gross Domestic Product (GDP), Fong said Malaysia's growth prospects were still good and expected to achieve 5.0 per cent growth this year, which is the strongest growth regionally, supported by resilient domestic demand.