The Malaysian ringgit is topping the gains list among Asian currencies, followed by the Singaporean dollar, thanks to the government stimulus and interest rate cuts.
The ringgit rose all week against Asian currencies, on speculations that the Bank Negara Malaysia, the national economic policy maker, is expected to cut interest rates after inflation had the most significant decline in 11 months. Interest rates in Malaysia have been cut three times since last October, reaching a record low of just 2%, now, speculations estimate that this record is once again to be broken, with rates to be set at 1.75%.
Investors and traders had a satisfying week in Asia, multiple reports from different countries boosted the chances of a quick economic recovery for many emergent markets, such as South Korea and Taiwan. In Malaysia, analysts look at the interest rate cuts as a big opportunity for capital inflow to the country, and it could also increase the domestic demand. A sense of relief, that the Malaysia hit the bottom in the first quarter and the worst moment of the crisis is already in the past led the Malaysian currency to a sequence of positive analysis by economists worldwide.
The USD/MYR was traded at 3.5855 falling from 3.6225 yesterday and 3.6375 in the beginning of the week. The GBP/MYR fell from 5.2744 to 5.2439 in the intraday comparison.
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