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Malaysian ringgit likely to see slight depreciation pressure amidst contracted account surplus

Malaysian current account surplus narrowed in the second quarter of this year. The surplus shrank to MYR 3.9 billion in the June quarter from MYR 15 billion the quarter before, largely because of a lower goods surplus and higher deficits in the services and primary income accounts.

Meanwhile, the country’s economy growth decelerated to 4.5 percent year-on-year in the second quarter from 5.4 percent in the prior quarter. In the near term, oil prices are expected to stay resilient but with limited upside potential as leveraged funds further trimmed their net long crude oil futures positions in the week through 14 August.

According to a Scotiabank research report, the Malaysian ringgit is expected to see some depreciation pressure in the midst of contracted current account surplus and fluctuating oil prices, while continuing to follow a wider market tone.

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