KUALA LUMPUR – The Malaysian ringgit closed weaker against the US dollar, quoted at 4.0695/0745 compared with 4.0515/0560 at the previous close, as investors moved into safe-haven currencies, according to a market economist.
IPPFA Sdn Bhd’s director of investment strategy and country economist, Mohd Sedek Jantan, attributed the move to safe-haven demand following what he described as a US attack on Venezuela and to firmer US growth momentum that has delayed expectations for interest-rate cuts in the United States.
“The move was reinforced by firm US growth momentum, which has pushed back expectations of interest rate cuts in the United States and kept yield differentials supportive of the greenback. As a result, emerging market currencies, including the ringgit, face short-term pressure despite stable domestic fundamentals,” he said.
He added that the ringgit’s performance needs to be viewed in the context of broader policy and regulatory settings, noting that Bank Negara Malaysia’s monetary stance and its management of the foreign-exchange market operate within the framework of the Central Bank of Malaysia Act, which mandates financial stability and orderly market conditions.
Analysts said the latest move in the currency is unlikely to trigger an immediate policy response but will be closely monitored by fiscal and monetary authorities given its implications for imported inflation, external debt servicing and government budgeting, including assumptions embedded in official forecasts and state-linked investment plans.
How the ringgit traded at the close
The ringgit closed weaker not only against the US dollar but also against a range of major and regional currencies, underscoring broad risk aversion toward emerging markets:
- Against the US dollar: 4.0695/0745 (previous 4.0515/0560)
- Against the Japanese yen: 2.5932/5965 (previous 2.5817/5848)
- Against the British pound: 5.4706/4774 (previous 5.4509/4569)
- Against the euro: 4.7540/7598 (previous 4.7488/7540)
- Against the Singapore dollar: 3.1603/1644 (previous 3.1502/1540)
- Against the Indonesian rupiah: 243.0/243.5 (previous 242.2/242.6)
- Against the Thai baht: 12.9891/13.0109 (previous 12.8996/9201)
- Against the Philippine peso: 6.88/6.90 (previous 6.88/6.89)
Currency quotations reflect bid/offer levels and indicate the ringgit finished the session weaker against a basket of major and regional peers. Dealers said trading volumes were moderate, with corporates largely on the sidelines and activity dominated by portfolio flows adjusting to the stronger US dollar narrative.
Market participants noted that further moves in the ringgit will depend on incoming US data, Federal Reserve communications and any guidance from Malaysian authorities on growth and inflation, including through updates to the government’s economic outlook and policy signals delivered around national budget and medium-term fiscal plans.