SINGAPORE: The soaring ringgit after the appointment of Pakatan Harapan chairman Anwar Ibrahim as Malaysia's new prime minister is not sustainable, one observer cautioned.
The currency had climbed by 1.8 per cent after Mr Anwar s appointment on Thursday November 24, the largest single-day gain since March 2016. The ringgit increased its gains by 0.8 per cent to 4.4542 against the US dollar on Friday.
By the end of the year, observers believe that the ringgit could trade back up to 4.6 against the dollar.
Dr Sailesh K. Jha, group chief economist and head of financial market research at RHB Bank, said on Friday that we're a little bit skeptical that this significant move down below 4.5 is going to be sustainable.
There has been no major changes to our currency view. Malaysia s currency and stocks went up after Mr Anwar was sworn in as Malaysia's 10th prime minister on Thursday, ending five days of political uncertainty post-election and capping his decades-long wait for the country's top job.
The inflation rate of Malaysia fell to 4 per cent in October, compared to the 4.5 per cent in September, the Department of Statistics Malaysia said on Friday.