HSBC says heightened global uncertainty is pushing Malaysian government-linked entities to repatriate overseas earnings, supporting the ringgit through steadier foreign exchange inflows. Daily FX turnover rose to US$20.2 billion in March, up from US$17.4 billion in February.
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Ringgit Under Pressure as HSBC Cuts Year-End Forecast to 4.90
However, the ringgit remains under pressure due to rising portfolio outflows, stagnant private investment, and a high correlation to the renminbi. HSBC downgraded its year-end forecast for the ringgit to 4.90 per US dollar, expecting it to weaken to 5.00 in Q3 before a slight recovery.
Despite trade improvements and policy support, HSBC views recent ringgit strength as unsustainable in the near term.
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