Ringgit Ends Higher Against US Dollar On US Government Shutdown Fears

By Engku Shariful Azni Engku Ab Latif

KUALA LUMPUR, Sept 29 (Bernama) -- The ringgit ended higher against the US dollar on Monday as concerns over a potential United States (US) government shutdown weighed on the greenback, an analyst said.

Reports indicated that the federal government is on the brink of a shutdown unless the US Congress can reach a funding agreement before the start of the new fiscal year on Oct 1.

At 6 pm, the local note rose to 4.2150/2200 against the greenback compared with Friday’s close at 4.2200/2250.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said a US government shutdown would mean limited services which, if prolonged, could undermine economic growth.

"The US Congress need to agree on the spending programme by the end of September to avoid a government shutdown. 

"Hence, the thesis for US interest rate cuts has gained momentum from such an event, resulting in a weaker US dollar," he told Bernama today.

At the close, however, the ringgit was lower against a basket of major currencies.

It eased to 2.8365/8400 against the Japanese yen from 2.8171/8206 at Friday’s close, slipped to 5.6612/6679 against the British pound from 5.6345/6412, and declined to 4.9387/9446 versus the euro from 4.9281/9340.

The local note was mostly lower against ASEAN currencies.

It fell to 3.2664/2706 vis-à-vis the Singapore dollar from 3.2630/2671 and depreciated to 13.0649/0857 against the Thai baht from 13.0587/1069 previously.

The ringgit also edged lower against the Indonesian rupiah at 252.6/253.1 from 252.1/252.5, and was flat versus the Philippine peso at 7.25/7.26 from 7.25/7.27 previously.

-- BERNAMA