KUALA LUMPUR (Feb 24): The ringgit weakened today past the RM3 mark against the Singapore dollar for the first time in about two weeks while depreciating past the RM4.20 level against the US dollar amid a confluence of factors, including the coronavirus (Covid-19) global outbreak, Malaysia’s political uncertainty and lower crude oil prices.

Malaysia's political landscape has been closely watched after unexpected talks yesterday between Tun Dr Mahathir Mohamad's Parti Pribumi Bersatu Malaysia and opposition parties to form a new government, which would exclude PKR president Datuk Seri Anwar Ibrahim.
 
Against the Singapore dollar today, the ringgit was traded at RM3.0101 at 3:08pm after changing hands between RM2.9898 and RM3.0135. The exchange rate weakened past the RM3.00 mark after closing below the level for the past 13 days since Feb 5, 2020.

Compared with the US dollar today, the ringgit depreciated to RM4.2250 at 3:11pm after changing hands between 4.2075 and 4.2271.

Market analyst at FXTM, Han Tan, told theedgemarkets.com today that other than recent political developments, the Covid-19 impact also weighed on the economy, adding to the downward pressure on the ringgit.

He said investors will be interpreting the political manoeuvring through the lens of policy continuity in determining whether the ringgit should remain on the weaker side against the US dollar.

“Should the uncertainties continue unabated, USD/MYR may carve out a path towards the 4.24-4.25 region, until there is more clarity with regard to Malaysia’s policy and economic outlook,” he said.

Lower crude oil prices could have also hit the ringgit because Malaysia is a net exporter of the commodity.

Reuters reported that oil prices slid as investors fretted about crude demand being pinched by the impact of the coronavirus outbreak, while leading producers appeared to be in no rush to curb output.

Brent crude slumped 2.4%, or US$1.40, to US$57.09 a barrel while US crude dropped 2.3%, or US$1.25, to US$52.13 a barrel, according to Reuters.