KUALA LUMPUR, April 12 — The ringgit was flat against the US dollar today as risk-off mode was prevalent, mainly due to the disappointing February Industrial Production Index (IPI) data, along with the International Monetary Fund’s (IMF) recent downgrade of its global growth forecast.
At 6pm, the ringgit was unchanged at 4.1120/1170 against the US dollar from 4.1120/1160 at yesterday’s close.
FXTM research analyst Lukman Otunuga said the weaker-than-expected IPI data for February 2019 had pressured the ringgit to trade closer to the 4.12-level against the greenback, far beyond the 4.06-4.10 range that the local note has held since February this year.
According to statistics released by the Department of Statistics yesterday, the February IPI grew 1.7 per cent year-on-year, registering the slowest growth since June 2018.
Meanwhile, commenting on the IMF’s downward revision of the global growth for 2019, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the IMF report also mentioned that the monetary authority should play an active role to sustain the economic growth.
“So obviously, the US Federal Reserve’s (Fed) interest rate cut mantra will hog the limelight going forward.
“Additionally, the European Central Bank and the Fed are concerned about the downside risks, especially with regards to trade protectionists policies,” he told Bernama today.
All in all, Mohd Afzanizam opined that there should be strong demand for the safe-haven currency and in the process, emerging markets currencies, including the ringgit, could be vulnerable in the immediate term.
Meanwhile, Otunuga believed that with Malaysia’s overall economic fundamentals expected to remain resilient amidst external headwinds, the fundamentals were anticipated to be broadly supportive of the ringgit moving forward.
Overall, the ringgit was traded mostly firmer against a basket of major currencies, except against the euro, where it was lower at 4.6519/6596 from 4.6367/6428 at the close yesterday.
The local note climbed further against the British pound to 5.3760/3842 from 5.3826/3883 and rose against the Japanese yen to 3.6744/6798 from 3.7008/7048 yesterday.
Vis-a-vis the Singapore dollar, it advanced to 3.0367/0406 from 3.0383/0417 yesterday. — Bernama
