Friday 29 Mar 2024
By
main news image

KUALA LUMPUR (Aug 24): The Malaysian ringgit weakened to a new 17-year low against the US dollar and breached the 3.0000 level against the Singapore dollar today amidst uncertainties in global economy.

As at 10.45am, the ringgit was quoted at 4.2578 against the greenback. It slipped to the lowest level of 4.2615 earlier at 9.45am.

At the current level, the ringgit has breached the pre-pegged lowest level of 3.9340 since Aug 31, 1998. The currency hit the lowest point of 4.7125 on Jan 9, 1998 against the US dollar.

Meanwhile, the ringgit fell against the Singapore dollar to below the 3.000 level to trade at the historically lowest level of 3.0110 as at 10.45am today.

The ringgit’s fall came after the Bank Negara Malaysia had announced that its foreign reserve had fallen further to RM356.4 billion (US$94.5 billion) as at Aug 14, 2015 from RM364.7 billion (US$96.7 billion) as at July 31, 2015.

Meanwhile, crude oil price has hit six-year low due to concern of oversupply. The US crude oil had fallen below US$40 per barrel to trade at US$39.58, while Brent crude traded at US$44.70 per barrel.

Kenanga Research said that the emerging market’s currencies, including the ringgit, would continue to be under selling pressure due to weakness in commodity prices, China’s large and sudden devaluation of its currency, and broad US dollar strength.

Domestically, financial fiscal governance and political issues would likely add to the mounting pressure on the ringgit. Hence, the firm expected the ringgit would immediately test the 4.20–4.25 level against the US dollar as volatility heightens ahead of a possible Federal Reserve rate decision, according to the note.

“The likelihood that it would breach this level is relatively high over the next few weeks. Given the unprecedented speed of ringgit depreciation and based on our preliminary analysis we may see the ringgit settling above 4.00-level against the US dollar by year end.

“This means that our newly-revised forecast of 3.87 is up for another revision, unmistakably very soon,” Kenanga added.

At the time of writing, ringgit depreciated 0.65% against the Australian dollar to quote at 3.0739, depreciated 4.12% against the euro to quote at 4.8946, and against the Great Britain Pound at 6.6835, down 1.87%.

 

      Print
      Text Size
      Share