The ringgit temporarily broke to 3.08 level this week and is expected to remain strong next week.
"The market may hold up at this current level," a dealer said, adding that robust domestic demand and credit growth were expected to entice fresh funds from foreign investors.
RHB Bank forex dealer Badeeudin Mohd Abu Bakar said that the ringgit might breach the 3.06 mark against the greenback in about two weeks’ time, after hitting its strongest level since October 1997 at 3.0873.
The local unit rallied to new 13-year highs in four straight weeks amid speculation that rules would be further loosened to enable the local currency to be traded offshore.
Yesterday, the local unit ended higher at 3.0900/0930 against the US dollar compared to Thursday's closing of 3.0950/0980 after the local bourse managed to pare some of its earlier losses on bargain hunting activities.
Bloomberg reported that Barclays Capital Plc had raised its forecast for the local currency, predicting a 6.1 per cent appreciation over the next 12 months as foreigners plow more funds into the nation's assets.
FTSE Group, a global index provider, had also upgraded Malaysia to "advanced emerging market" status, a move that will attract as much as US$3 billion of new inflows to the local stock market, Bloomberg quoted Barclays as saying.
Early this week, trading of the ringgit began on a strong note before drawing back on Thursday, reflecting the strengthening of the dollar against other major currencies.
It, however recovered in late trading Friday to close at 3.0900/0930 compared with last week's closing of 3.1010/1040.
Against the British pound, the ringit appreciated to 4.8460/8526 from 4.8710/8770 but declined against the euro to 4.1335/1381 from 4.0762/0794.
The local unit weakened against the Singapore dollar to 2.3287/3328 from 2.3237/3273 and against the yen to 3.6521/6569 from 3.6097/6129. -- Bernama
