Question
QUESTION 4 (18 marks) a) Read the excerpt below, and answer the following questions:- A weaker dollar is a key part of the ringgit's strength,
QUESTION 4 (18 marks) a) Read the excerpt below, and answer the following questions:-
"A weaker dollar is a key part of the ringgit's strength, with the strong run in the Chinese yuan also helping to lift the currency as well given the strong historical correlation," ANZ's head of Asia research Khoon Goh said before the ringgit hit the high. "An improving global outlook has led to an improvement in oil prices. While the currency's strength may be viewed as a vote of confidence, it also risks hurting Malaysia's export-reliant economy which is slowly recovering from its biggest contraction in over two decades. A revival in bond inflows could add to the ringgit's upward trajectory as a search for yield lures global funds to emerging Asian debt". Source: Malaysia's ringgit erases Covid-19 losses to rise to strongest since 2018. The Business Times, 11 December 2020.
(i) How would you display the fact that the weaker dollar is part of the ringgit's strength? (4 marks)
(ii) Why do you think a revival in the bond inflows could increase the ringgit value? (4 marks) [Use appropriate graphs to support your answers in (i) and (ii) above]
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