Ringgit ends higher at RM4.44 amid US tariff pressures

 

KUALA LUMPUR: 

The ringgit, which faced pressure against the US dollar following US president Donald Trump’s announcements on global reciprocal tariffs, closed relatively stable today, said an analyst.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the ringgit traded weaker in the morning session against the US dollar to RM4.4822 but regained ground by late afternoon.

He said traders, investors, and analysts were weighing the potential fallout due to the tariff announcements.

“In response, the investment, trade and industry ministry expressed openness to engage in discussions with the US, signalling Malaysia’s pragmatic stance.

A tit-for-tat approach, after all, could backfire-import tariffs essentially function as a domestic tax burden.

“This measured response also helps maintain diplomatic ties, with both sides appearing keen to resolve tensions.

“Nonetheless, market sentiment is expected to remain fragile in the short-term as the risk of broader retaliatory actions looms, potentially dampening global demand,” he told Bernama.

Afzanizam said that given this backdrop, the ringgit is likely to trade within the RM4.44 to RM4.45 range in the near-term.

Meanwhile, SPI Asset Management managing director Stephen Innes said the road ahead for the ringgit could be challenging from a fundamental perspective.

“However, foreign exchange is a relative game, and local traders are already shifting focus to the US side of the equation – specifically, the growing probability that this tariff shock triggers a US Federal Reserve (Fed) interest rate cut, maybe even sooner than the market’s current pricing.

“So, while the ringgit is still nursing wounds, the narrative has shifted.

“(Now) it is less about the ringgit’s weakness and more about the US macro blowback, which could eventually lend some support for the ringgit. A Fed dovish pivot could be timely,” he said.

On April 2, 2025, Trump declared America’s ‘Liberation Day’ from the White House Rose Garden and signed an executive order launching a sweeping global tariff regime.

Under this new ‘reciprocal tariff’ system, the US would impose a baseline tariff of 10% on all imports and an additional surcharge based on each country’s tariffs on US goods.

The targets are broad and undisguised: 34% on China, 32% on Indonesia, 26% on India, 24% on Malaysia, and 20% on the EU, among others.

According to the US Bureau of Economic Analysis, Malaysia ranks 15th on the US list with a trade surplus of US$24.8 billion in 2024.

At 6pm, the ringgit traded marginally higher at 4.4400/4.4460 against the greenback from yesterday’s close of 4.4510/4.4565.

Meanwhile, the ringgit traded lower against major currencies today.

It declined against the Japanese yen to 3.0289/3.0332 from 2.9783/2.9821, weakened against the euro to 4.8969/4.9035 from 4.8098/4.8157 and decreased against the British pound to 5.8470/5.8549 from 5.7632/5.7703 yesterday.

On the other hand, the local currency was higher against Asean currencies except for the Singapore dollar.

It rose against the Thai baht to 12.9529/12.9769 from 13.0260/13.0490, gained against the Indonesian rupiah at 265.1/265.6 from 266.3/266.7 and was higher versus the Philippine peso at 7.77/7.79 from 7.78/7.79 previously.

However, the ringgit fell against the Singapore dollar to 3.3229/3.3276 from 3.3150/3.3193 at yesterday’s close. - FMT