MYR's Direction
Among the gainers in the region, Malaysia's ringgit rose for a second day on speculation the central bank will favor a stronger currency, choosing to focus on fighting inflation over growth.
The nation's economy has enough ``flexibility'' to withstand any global economic slowdown as consumer spending at home increases, Second Finance Minister Nor Mohamed Yakcop said this month.
The ringgit traded at the strongest level in more than a week as Malaysia's inflation accelerated to the fastest pace in 14 months in April, a government report showed yesterday.
``Central banks are likely to keep using their currencies to fight inflation,'' said Yahya Mohd Nor, head of currency trading at Affin Bank Bhd. in Kuala Lumpur.
The ringgit traded at 3.2099 per dollar from 3.2215 late yesterday, according to data compiled by Bloomberg. The currency may rise as high as 3.1950 today, Yahya said.
Traders increased bets the ringgit's appreciation will gain momentum in the next 12 months, according to non-deliverable forwards contracts. The currency will reach an implied rate of 3.1869 per dollar, compared with 3.2605 a week ago, according to the forwards. The contracts are agreements in which assets are bought and sold at current prices for future delivery.
Source: Bloomberg