KUALA LUMPUR (DEC 18): MIDF Research is expecting the Malaysian ringgit to continue its recovery trend next year, with a projection of 3.95 against the US dollar by end-2018.

Speaking at a media briefing on Malaysia's 2018 economic outlook today, MIDF Amanah Investment Bank Bhd chief economist Kamaruddin Mohd Nor also forecasted the ringgit to close the year 2017 at 4.05 against the greenback.

"The anticipated three-time interest rate hike by the US Federal Reserve next year will be negative to the ringgit and the currencies of other emerging markets," he said.

"However, Malaysia's exports growth is expected to remain at a good pace of 9.2% in 2018, which will in turn continue to benefit the ringgit," said Kamaruddin.

Kamaruddin said that from Jan to Oct 2017, Malaysian exports experienced a double-digit growth of 21%. He expects the momentum to sustain in 2018, but in moderation coming from a high base this year.

Also keeping the negative impact of US Fed rate hike at bay, he said, would be the expected one-time Overnight Policy Rate hike by Bank Negara Malaysia by 25 basis points in 2018.

Other factors include the trend of stabilising commodity prices, as well as sustained global economic growth. Kamaruddin projected global gross domestic product to grow at 3.8% in 2018, higher than International Monetary Fund's (IMF) forecast of 3.6%, which was published in July.

On Jan 4 this year, the Malaysian ringgit hit its multi-year low of 4.4960 against the US dollar. It has since recovered by some 9.11% to 4.0865 against the greenback at press time, making it one of the best-performing currencies in the region in 2017.