Thursday 28 Mar 2024
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KUALA LUMPUR: The ringgit slipped to 4.3405 against the US dollar — a new 17-year low — as the greenback strengthened against most Asian currencies. A drop in crude oil prices added more pressure on the local currency.

As at 5pm yesterday, the ringgit depreciated 1.64% against the US dollar to close at 4.3300 after it hit an intraday low of 4.3405. The ringgit registered its historical low against the US dollar of 4.7125 in January 1998, during the Asian financial crisis. This is in comparison with its strongest level of 2.9390 recorded on July 27, 2011.

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The ringgit also weakened against the Singapore dollar to hit its all-time low of 3.0424 yesterday, before closing at 3.0356.

In a research note yesterday, AmBank FX Research said the ringgit fell 1.58% against the US dollar, reversing its gains last week to be the top loser among Asian currencies.

“The Purchasing Managers’ Index for [the] manufacturing sector declined sharply to a 34-month low of 47.2 in August from 47.7 previously.

“Exports grew 3.5% in July, [which were] softer compared with 5% in June, which translated into [a] lower trade surplus of RM2.38 billion against [the] previous reading of RM7.98 billion, another downwards pressure on fear of declining foreign exchange reserves,” it added. 

The firm noted that the one-month US dollar/ringgit volatility, however, was holding steadily despite local equity markets dipping below the critical 1,600 level. The weaker ringgit did not augur well for the equity market. The FBM KLCI shed 6.31 points or 0.4% to close at 1,582.85 points.

Brent crude for October delivery fell 1.09% to US$49.07 (RM212.47) a barrel as of 5.56pm yesterday, while US crude for October delivery was down 1.04% at US$45.57 a barrel.

Commenting on the benchmark index, AllianceDBS Research said it was still under persistent selling pressure amid jittery sentiment.

“The key index was in the red throughout the trading sessions before rebounding in the last few minutes [on] buying of selective blue chips,” it added.

It added that despite the index having stayed supportive above the 1,580 level for six days, the market dipped below the 1,580 level yesterday as market participants rushed to liquidate their stock positions.

 

This article first appeared in digitaledge Daily, on September 8, 2015.

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