Ringgit Strengthens as Singapore Boosts GDP Forecast, CurrencyApril 13, 2010, 9:54 PM EDT
By David Yong
April 14 (Bloomberg) -- Malaysia’s ringgit gained, snapping a two-day slide, after Singapore raised its economic growth forecast and unexpectedly revalued the local dollar.
The ringgit strengthened from a one-week low against the U.S. currency as Singapore, Malaysia’s biggest export market, said today the economy will expand by as much as 9 percent in 2010, compared with a previous prediction for growth of as much as 6.5 percent. The Singapore dollar jumped the most in 10 months after the central bank said it will seek a “modest and gradual” appreciation in its currency.
“The decision confirmed the trend that economic growth is getting stronger going forward,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ Bhd. in Kuala Lumpur. “It puts Asian currencies under appreciation pressure, and we should now be looking at a stronger ringgit by year-end.”
The ringgit advanced 0.6 percent to 3.2045 per dollar as of 9:29 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency weakened 1.1 percent in the past two days after touching a 23-month high of 3.1785 on April 12.
The Singapore dollar gained as much as 1 percent to S$1.3791 versus the U.S. currency, the biggest increase since June 2009. The ringgit may reach 3 per dollar against the greenback by year-end, Banno said, compared with a previous prediction for 3.10 to 3.15.
Malaysia shipped 77.2 billion ringgit ($24 billion) of goods to Singapore in 2009, or 14 percent of total exports. China was the second largest with a 12 percent share, according to trade ministry statistics.
--Editors: Ven Ram, Simon Harvey
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