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Several factors contribute to the ringgit's robust performance. A significant interest rate cut by the US Federal Reserve, combined with an influx of foreign investments and overall confidence in Malaysia's economic and political stability, has bolstered the currency. Year-to-date, the ringgit has appreciated over 11% against the US dollar, positioning it as Asia's top-performing currency.
MIDF Research has maintained its 2024 headline CPI growth projection at 2.3%, supported by the moderate inflation rate of 1.8% recorded for the first eight months of the year. In comparison, last year's CPI increase was recorded at 2.5%.
Despite the uptick in inflation, private-sector economists anticipate that the Monetary Authority of Singapore (MAS) will maintain its current monetary policy stance at the upcoming meeting in October. This outlook stems from the belief that the central bank is likely to prioritize stability amid the evolving economic landscape.
As of the latest trading session, the ringgit was seen strengthening, with analysts attributing the gains to improved economic indicators. Lower inflation rates are typically viewed as favorable, as they suggest stability in the economy and can lead to increased consumer spending. This shift has provided a more favorable environment for the currency, enhancing its appeal to investors.
The August inflation figure is the highest recorded in Tokyo since early 2023, reflecting growing inflationary pressures that have been largely absent in recent years.
Singapore's core inflation rate decreased to 2.5% in July, marking the lowest level since February 2022.