KUALA LUMPUR: The ringgit continued its downward momentum against the US dollar on Thursday, albeit marginally, weighed by a decline in Malaysia’s international reserves, said an economist. At 6 pm, the local note dipped to 4.4020/4065 versus the greenback from Wednesday’s close of 4.4000/4070.
According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that Malaysia’s international reserves had decreased to US$117.6 billion as of October 30, 2024, from US$119.6 billion on October 15, 2024. This decline suggests an outflow of funds, resulting in a weaker ringgit. Bank Negara Malaysia (BNM) reported that the latest reserves position was sufficient to finance 4.8 months of imports of goods and services and was 0.9 times the total short-term external debt.
Commenting on the ringgit’s retreat, Afzanizam mentioned that foreign investors might have been cautious about the prospects for US rate cuts, given the robust American economy, which does not necessitate
an aggressive rate reduction. He highlighted that the immediate focus is on events following the US election, especially comments on policy-related matters by US President-elect Donald Trump.
Additionally, Afzanizam pointed out that “tonight, the focus is on the US Federal Open Market Committee meeting where the consensus is for a 25 basis points cut in the Fed funds rate.” He predicted that the ringgit would remain rangebound in the immediate term.
At the close, the ringgit was lower against a basket of major currencies. It fell vis-a-vis the British pound to 5.6821/6879 from Wednesday’s close of 5.6751/6841, inched down versus the Japanese yen to 2.8597/8629 from 2.8558/8606 yesterday, and dipped against the euro to 4.7317/7365 from 4.7313/7388.
The local note traded mixed versus ASEAN currencies. It weakened vis-a-vis the Singapore dollar to 3.3178/3216 from 3.3073/3128 at yesterday’s close and went down against the Indonesian rupiah to 279.6/280.0 from 277.8/278.4 previously. However, the ringgit rose
versus the Philippine peso to 7.49/7.51 from 7.50/7.51 and climbed against the Thai baht to 12.8290/8492 from 12.8768/9048 yesterday.