Kuala lumpur: The ringgit experienced a decline against the US dollar on Monday, influenced by escalating tensions in West Asia, according to an analyst. By 6 pm, the Malaysian currency depreciated to 3.9735/9805 against the US dollar, down from 3.9625/9680 at the previous Friday's close.
According to BERNAMA News Agency, the failure of US-Iran negotiations to yield an agreement on Sunday after prolonged discussions in Islamabad has led to significant developments. This diplomatic impasse prompted US President Donald Trump to announce a blockade of the Strait of Hormuz. The US Central Command subsequently declared its intention to enforce a blockade on all maritime traffic entering and leaving Iranian ports starting April 13 at 10 am Eastern US Time (1400 GMT).
Bank Muamalat Malaysia Bhd's chief economist, Mohd Afzanizam Abdul Rashid, highlighted that the stalled talks and the impending blockade have heightened concerns over possible disruptions in oil and gas supplies, potentially exacerbating inflation pressures. "The subsequent announcement by Trump to block the Straits of Hormuz has resulted in concern that the shortages in oil and gas supplies will exert further pressure on inflation going forward," he remarked to Bernama.
In reaction to these developments, Brent crude oil prices surged by 7.28 percent, reaching US$102.24 per barrel. At the close of trading, the ringgit was generally weaker against a range of major currencies. It fell against the British pound to 5.3360/3454 from 5.3248/3322 and against the euro to 4.6434/6516 from 4.6401/6465. However, it showed a slight improvement against the Japanese yen, trading at 2.4875/4920 compared to 2.4882/4918 at last Friday's close.
The ringgit's performance against ASEAN currencies was mixed. It declined against the Singapore dollar to 3.1145/1205 from 3.1093/1139 and weakened against the Indonesian rupiah to 232.2/232.8 from 231.6/232.0. Conversely, the local note strengthened against the Thai baht to 12.3202/3503 from 12.3289/3525 and remained stable against the Philippine peso at 6.60/6.62.