The Fed may boost interest rates by 0.75 percent next week.
In May, inflation in the United States reached a 40-year high! The Federal Reserve is expected to boost interest rates by 0.75 percent next week. The ringgit will devalue quicker as a result of the Fed’s interest rate hike!
In May, the CPI, or consumer price index, in the United States reached 8.6%, the highest level since December 1981. The Fed is likely to raise interest rates by 0.50 percent to 0.75 percent in June, then continue to raise interest rates by 0.50 percent in July and September before returning to 0.25 percent. In the second quarter of 2023, the US base rate will most likely be 3.50 percent to 3.75 percent.
The Fed’s interest rate boost will almost certainly hasten the dollar’s return to the United States. The dollar will rise as a result of a shortage of dollars in emerging countries and a void in the United States. In terms of the ringgit, this will likewise result in a devaluation.
The US dollar is currently worth 4.382 ringgits, according to data from a currency changer in Kuala Lumpur, and it is not ruled out that it will fall below the 4.40 ringgit mark next week. In terms of Singapore dollars, 1 SGD is worth RM3.165.
In July, when the country’s overnight policy rate is 2.25 percent to 2.50 percent, Bank Negara Malaysia (BNM) may be obliged to raise rates by 0.25 percent to 0.50 percent.
