Malaysian forex receipts expected to rise

The value of a particular currency should theoretically reflect demand for that currency. Accordingly, diligent forex traders scrutinize trade data and capital flows in order to identify trends in the movement of foreign exchange. Malaysia, for instance, recently announced that it expects tourism to double in the next five years. Because tourism represents one of Malaysia’s largest exports, the country will witness significant inflows of foreign exchange. While this activity should buoy Malaysia’s currency, the Malaysian Central Bank will likely continue to ‘manage’ the Ringgit and prevent it from appreciating too much. The Business Times reports:

The Ministry of Tourism has projected RM59.4 billion in tourist receipts in 2010 from 24.6 million tourists. This compares to RM29.7 billion spent by a total 15.7 million foreign holiday makers in Malaysia last year.

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