External pressures weigh on Ringgit to close lower for fifth consecutive day
KUALA LUMPUR - External pressures continue to weigh on the ringgit, causing it to close lower against the US dollar on the last trading day for the week.
The local note ended lower despite encouraging domestic developments such as the Consumer Price Index coming in lower and the inflation rate going down after peaking at 4.7 per cent in August last year.
At 6pm, the local note ended at 4.6760/6805 against the greenback compared with 4.6525/6580 on Thursday.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the ringgit was severely affected by external events, in particular, the unexpected bank rate increase by the Bank of England of 50 basis points along with a hawkish stand by the United States Federal Reserve.
"Malaysia’s CPI came in lower than expected to 2.8 per cent in May and the inflation rate has been improving.
"In a lot of sense, the 125 basis points overnight policy rate (OPR) hike since March last year has started to have an impact on inflation,” he told Bernama.
Afzanizam said at the current juncture, the real rate of interest for Malaysia has turned positive at 0.20 per cent, hence, there is no urgency for Bank Negara Malaysia to raise the OPR again in the near term.
Meanwhile, the ringgit strengthened against a basket of major currencies.
At the close, the local note was marginally higher versus the British pound to 5.9469/9527 from Thursday’s closing of 5.9496/9567, strengthened against the Japanese yen to 3.2645/2680 from 3.2776/2817 and appreciated vis-a-vis the euro to 5.0781/0830 from 5.1182/1243 on Thursday.
However, the local note weakened against other Asean currencies except against the Singapore dollar.
The ringgit went up against the Singapore dollar to 3.4568/4604 from 3.4697/4740 previously, it was marginally lower versus the Thai baht at 13.2765/2950 from 13.2720/2934 yesterday, fell further vis-a-vis the Indonesian rupiah to 311.7/312.2 from 311.3/311.9, and depreciated against the Philippine peso to 8.38/8.40 from 8.36/8.38 yesterday. - BERNAMA
