In 2010, the ringgit appreaciated 11.1% against the US dollar, reaching a peak of 3.0833 per dollar on Nov 4.
As in the previous years, the underlying trend of the ringgit continued to be driven by positive net trade balance.
Ringgit developments, however, were heavily influenced by significant two-way flows of portfolio investments arising from a comnination of external and domestic factors.
The large gross portfolio inflows during the year were partially offset by the large gross portfolio outflows, resulting in net inflows of RM44.9bil.
The appreciating trend of the ringgit and other regional currencies was punctuated by a number of episodes of reversals arising mainly from global developments such as the sovereign debt and banking system concerns in Europe.
Against other major currencies, the ringgit strengthened against the euro (20.6%) and pound stering (15%), but weakened against the Japanese yen (minus 2.1%). The euro's weakness was apparent throughout 2010 amidst sovereign debt and banking system concerns in Europe.
Against regional currencies, the ringgit broadly appreciated.
Interest rates rose in 2010 from historic lows due to the central bank's decision to normalise monetary conditions to prevent the risk of financial imbalances that could undermine the recovery process.
[Sources: The Star Biz, 24th Mar 2011]
As in the previous years, the underlying trend of the ringgit continued to be driven by positive net trade balance.
Ringgit developments, however, were heavily influenced by significant two-way flows of portfolio investments arising from a comnination of external and domestic factors.
The large gross portfolio inflows during the year were partially offset by the large gross portfolio outflows, resulting in net inflows of RM44.9bil.
The appreciating trend of the ringgit and other regional currencies was punctuated by a number of episodes of reversals arising mainly from global developments such as the sovereign debt and banking system concerns in Europe.
Against other major currencies, the ringgit strengthened against the euro (20.6%) and pound stering (15%), but weakened against the Japanese yen (minus 2.1%). The euro's weakness was apparent throughout 2010 amidst sovereign debt and banking system concerns in Europe.
Against regional currencies, the ringgit broadly appreciated.
Interest rates rose in 2010 from historic lows due to the central bank's decision to normalise monetary conditions to prevent the risk of financial imbalances that could undermine the recovery process.
[Sources: The Star Biz, 24th Mar 2011]
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