Malaysian currency on Wednesday continued the upward momentum against the greenback, further breaking the nine-year high set on Tuesday.

It closed at 3.4930/4940 against the U.S. dollars on Wednesday, jumping from the 3.4955/4980 in the previous day. The ringgit on Tuesday breached the 3.50 barrier, the highest record since the early 1998.

Local media reports said strong foreign fund flows into the stock market and friendly comments from the central bank supported the further strengthening of the local currency.

Malaysia pegged the ringgit against the U.S. dollar at 3.80 since 1998. Beginning from July 2005, it was de-pegged and floated against a basket of currencies. It has appreciated gradually since then.

Local think tank Asian Strategy and Leadership Institute (ASLI) said the currency is expected to further appreciate with the ringgit at 3.4 against the U.S. dollar by year-end and at 3.3 by the end of 2008.

ASLI made the forecast in its report entitled "Malaysia Economic Perspectives" launched Wednesday here.

ASLI Center for Public Policy Studies Chairman Ramon V. Navaratnam said ringgit appreciation will facilitate private investments through lowering the costs of imported technology, machinery and expertise.

The private think tank predicts the national economy to sustaina growth rate of 5.9 percent this year and in 2008, boosted by some favorable factors, including the strengthening ringgit.

On the government's side, central bank governor Zeti Akhtar Aziz Tuesday made friendly remarks on the foreign exchange market, reiterating the government has no "pre-determined" rate for the currency.

"What is important in the foreign exchange market is that we don't see sudden and disruptive changes in our currency," she was quoted as saying by the New Straits Times (NST).

Though some local traders had expected the central bank to intervene in case the stronger ringgit might affect the country's export competitiveness, Zeti said the strengthening currency was not hurting exporters.

Earlier in late January, Deputy Finance Minister Ng Yen Yen expressed the same view, saying the government will not intervene in the local foreign exchange market as the ringgit is capable of handling any stress in the market.

She added the government will always keep a close watch, though it does not wish to "take any unnecessary interference in determining the level of the ringgit."

Ng also said local exporters should find out all possible ways to sharpen the competitive edge of their products instead of hoping for the government's intervention.

The ringgit has been one of the best performers among 15 Asian currencies so far this year, according to the NST report

Source:Xinhua