Over the weekend, Prime Minister Najib Razak stated that Malaysia was looking at allowing offshore trading of the ringgit. But Malaysia would need to make the currency fully convertible on the capital account first, and so would also have to become more comfortable with significant financial flows going overseas. Increased internationalisation is only a matter of time but the move will be slow. It will be tougher for the ringgit to appreciate further from current levels but, having already hit our end- 2010 target against the US dollar, we have refreshed the view and still expect a little more upside.
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