Ringgit hit 26-year low

 

KUALA LUMPUR: The ringgit closed lower today against the US dollar, along with other emerging currencies, as investors opted for the greenback on concerns over global economic prospects and ahead of US data release later this week that may influence the interest rate outlook in the US.

SPI Asset Management MD, Stephen Innes said global foreign exchange (FX) markets were trading cautiously ahead of a slew of important US economic data, which could influence expectations regarding a potential US interest rate cut in March.

Meanwhile, Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid noted that Malaysia’s inflation rate, released today, showed that prices increased by 2.5% in 2023, lower than the 3.3% recorded in 2022.

“On that note, we opined that Bank Negara Malaysia (BNM) might keep the overnight policy rate (OPR) steady as the stance of monetary policy can be deemed restrictive given that the real rate of interest currently stood at 1.5% in December,” Afzanizam told Bernama.

Besides awaiting BNM’s first monetary policy statement on Jan 24, the week is expected to be busy with the Bank of Japan’s latest monetary policy decision, slated to be released early Tuesday morning, and the European Central Bank’s monetary policy decision on Wednesday.

At 6pm, the ringgit hit a 26-year low at 4.7280/4.7335 against the greenback, compared with last Friday’s close of 4.7160/4.7210 and against the lows reached in 1998.

Against a basket of major currencies, the ringgit was also traded lower.

It depreciated against the euro at 5.1516/5.1576 from 5.1324/5.1379 and was lower against the British pound at 6.0065/6.0134 from 5.9822/5.9886.

It weakened vis-à-vis the Japanese yen to 3.1918/3.1957 from 3.1871/3.1907 at Friday’s close.

At the same time, the local currency was traded mixed against Asean currencies.

It went down against the Singapore dollar to 3.5252/3.5298 from 3.5176/3.5216 and eased against the Indonesian rupiah to 302.3/302.8 from 301.9/302.4 at last week’s close.

The ringgit appreciated against the Philippine peso to 8.40/8.42 from 8.43/8.44 and rose against the Thai baht to 13.2493/13.2706 from 13.2733/13.2941, previously. - FMT