Ringgit Slips Amid Rising Geopolitical Risks, But Remains Top Currency Globally Today
By Nurul Jannah Kamaruddin
KUALA LUMPUR, Oct 2 (Bernama) -- The ringgit closed lower on Wednesday as rising geopolitical risks spurred the buying of safe haven assets such as the greenback, nevertheless it still emerged as a global best performer against the US dollar in a three-month period from July 2 to Oct 2.
Analyst attribute the ringgit's recent strong performance to the implementation of economic reforms in Malaysia, along with political stability that has led to postive reviews by credit rating agencies and global investment banks, resulting in more inflows from foreign funds.
At 6 pm, the local note slipped to 4.1730/1790 versus the greenback compared to yesterday’s close of 4.1530/1610.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit had been the best performing currency in the third quarter due to anticipation of the US interest rate cuts, which happened in September. This has made the prospect for the return of investment in ringgit assets look better, amid anticipation of the narrowing gap between Malaysia and US interest rates.
Afzanizam noted the risk-off mode in financial markets globally today, not just in Malaysia, as traders and investors turned cautious after Iran launched missiles at Israel in retaliation for Israel’s raids in Lebanon.
“Hence, the safe haven currency, namely the US dollar, will be a highly sought after currency. This will continue to shape market sentiments in the near term and the ringgit would continue to remain weak against the greenback,” he told Bernama.
He said investors will also closely monitor upcoming US economic data going forward, especially the ISM services PMI will on Thursday the US non-farm payroll data on Friday.
Tthe ringgit also slid against a basket of major currencies.
It weakened against the Japanese yen to 2.8931/8975 from 2.8892/8950 at Tuesday’s close, deppreciated vis-a-vis the euro to 4.6208/6274 from 4.6078/6166 and was lower gainst the British pound at 5.5472/5551 from 5.5335/5441 yesterday.
The local currency mostly fell against ASEAN currencies, except versus the Thai baht, where it rose to 12.7350/7587 from 12.7412/7716 at Tuesday’s close. It was lower against the Singapore dollar at 3.2386/2436 from 3.2269/2334 yesterday, declined slightly versus the Indonesian rupiah to 273.2/273.8 from 273.1/273.7 and went down against the Philippine peso to 7.43/7.44 from 7.39/7.41.
-- BERNAMA