The ringgit is being pressured by the Iran war, and the appointment of a new supreme leader suggests the conflict could be protracted, an analyst said.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said Brent crude shot up to as high as US$118.35 per barrel during the morning session, but later hovered around US$107.91 per barrel.
Crude oil prices surged past US$105 per barrel and briefly peaked at US$108 on Sunday after Mojtaba Khamenei was named Iran’s new supreme leader following the death of his father Ayatollah Ali Khamenei in a US-Israeli airstrike.
At the time of writing, Brent crude oil price rose 12.16% to US$104.75 per barrel.
“The ringgit continues to be affected by the war in Iran. The appointment of the new supreme leader suggests that the conflict is likely to be protracted,” he told Bernama.
Afzanizam said fears over global inflation and how central banks would respond resulted in higher US Treasury yields.
“Obviously, risk aversion has driven market sentiment into a weaker trajectory. Hence, the ringgit is expected to remain weak in the near term,” he said.
At 6pm, the local currency slipped to 3.9590/3.9655 against the greenback from Friday’s close of 3.9425/3.9535.
At the close, the ringgit traded lower against a basket of major currencies.
It slid vis-à-vis the Japanese yen to 2.4992/2.5035 from 2.4973/2.5044 last Friday, eased versus the British pound to 5.2809/5.2896 from 5.2530/5.2676 and fell against the euro to 4.5738/4.5813 from 4.5634/4.5762 previously.
Meanwhile, the local note traded mixed against its Asean peers.
The ringgit appreciated vis-à-vis the Thai baht to 12.3345/12.3617 from 12.3392/12.3810 on Friday and gained versus the Philippine peso at 6.65/6.67 from 6.68/6.70.
However, the local note trended lower versus the Singapore dollar to 3.0925/3.0978 from 3.0779/3.0867 and decreased against the Indonesian rupiah to 233.5/234.0 from 232.9/233.6 previously. - FMT
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