KUALA LUMPUR, Oct 21 — The ringgit further weakened against the US dollar today, closing the week at a new all-time low of 4.738 due to the absence of fresh market catalyst, analysts said.
At 6pm, the local note further fell by 110 basis points to 4.7380/7395 versus the greenback from yesterday’s close of 4.7270/7290.
SPI Asset Management managing director Stephen Innes said that in line with Asia’s foreign exchange (FX), the ringgit continued its freefall today after US Treasury 10-year yields moved through 4.25 per cent for the first time since 2008.
He said the move was triggered by the hawkish US Federal Reserve (Fed) officials who were reigniting fears of stricter monetary tightening that could potentially trigger a worldwide recession.
“But there is no respite from local concerns as worries about China’s rigid pandemic rules continued to weigh on regional currency markets amid additional lockdowns,” he told Bernama.
Reports said China’s capital, Beijing, has tightened measures to curb Covid-19, strengthening public checks and locking down some residential compounds after a quadrupling of its cases in recent weeks.
On the local front, an analyst said that with the hawkish Fed stance, Bank Negara Malaysia is expected to implement another Overnight Policy Rate (OPR) increase with the aim to stabilise the depreciating ringgit and attract investments into the country.
“While food inflation is taking a toll due to the weakening ringgit, consumer power is expected to be re-balanced with the increase in fixed deposit and investment dividend.
“However, as Malaysia is now on the 15th General Election (GE15) mode, investors are likely to take a wait-and-see approach to see what policies would be implemented thereon,” according to an analyst.
The Election Commission on October 20 has set the polling day for GE15 on November 19.
It also announced that nomination day for candidates would be on November 5 and early voting on November 15.
Besides that, caretaker Prime Minister Datuk Seri Ismail Sabri Yaakob had on October 17 announced that Malaysia’s national budget for 2023 would be tabled again before the end of this year.
Meanwhile, the ringgit traded higher against a basket of major currencies from yesterday’s closing.
The local currency rose against the euro to 4.6139/6153 from 4.6244/6264 and went up vis-a-vis the British pound to 5.2677/2694 from 5.2971/29935 at the close yesterday.
It improved against the Singapore dollar to 3.3144/3157 from 3.3172/3188 previously and versus the Japanese yen, it gained to 3.1384/1396 from 3.1547/1565 on yesterday’s closing. — Bernama
