KUALA LUMPUR, Jan 17 — HSBC Group believes the undervalued ringgit will recover in 2022 as Malaysia’s economy emerges from a ‘double-dip’ recession despite a lot of uncertainties.
Asian economics research co-head Frederic Neumann said even though the US dollar-Malaysian ringgit pairing is hovering near its year-to-date high due to various external challenges, the bank is optimistic about Malaysia’s consumption prospects and exports outlook.
“Foreign direct investment (FDI) inflows could rise further based on previously approved FDI applications, and this should support the ringgit as the source of growth,” he said during the HSBC Asian Outlook 2021 virtual briefing today.
He added that Bank Negara Malaysia’s (BNM) policy normalisation should also help the local note to maintain a yield advantage against the US dollar and keep real rates positive.
“Greater confidence in the domestic economy and local assets would also help curb residents’ foreign asset accumulation,” said Neumann. — Bernama