KUALA LUMPUR, Oct 24 — The ringgit is expected to strengthen by five per cent if the current United States (US) Vice President Kamala Harris is elected as US president before the end of the year, said Allianz SE chief economist Ludovic Subran.
The 2024 US elections are scheduled to be held on November 5, 2024. The presidential election year will determine both the president and vice president.
He said that the exchange rate is highly volatile and believes the US dollar would be much stronger under a potential re-election of former US president Donald Trump, while it would be weaker if Harris was elected.
“For the ringgit, a re-election of Trump could lead to a further depreciation of five to ten per cent in 2025, while under Harris, a slight depreciation of two to three per cent is expected. These figures are projections for the end of the year.
“However, I still think that the vulnerabilities that we highlighted in terms of adjustment and other factors still create a bit of a downward pressure for the ringgit today. That said, the ringgit is not massively overvalued; the real issue is the external headwinds,” he said at the Asia Pacific Economic Outlook 2024 here today.
Subran said Malaysia’s requirement for external capital to drive growth is vital.
“I remain optimistic, believing that a two to three per cent decrease in the ringgit under Harris is very manageable.
“There’s a good chance the ringgit may appreciate in the short term and stabilise by the end of 2025. The main concern is Trump, as his leadership could lead to further devaluation,” he added.
The ringgit has depreciated by about five per cent against the US dollar this month and is traded at 4.3500/3550 against the greenback at 4.05pm, compared with Wednesday’s close of 4.3490/3535. — Bernama
