KUALA LUMPUR, Feb 9 — The ringgit closed firmer against the US dollar today amid the retracement of the greenback and supported by the steady climb in crude oil prices, analysts said.
At the close, the local currency rose to 4.0460/0500 against the US dollar from Monday’s close of 4.0630/0680.
An analyst said the US dollar retreated as investors continued to doubt the pace of the US economic recovery against the backdrop of a much-weaker-than-expected January non-farm payrolls data released on Friday.
“The tepid job market sentiment called for more fiscal support and while the additional round of stimulus measures could support economic recovery in the US, the markets are concerned that their rollout could widen the current account deficit.
“This could weaken investor confidence in the US dollar and keep it bearish in the coming weeks,” he told Bernama.
At the time of writing, Brent crude gained 0.50 per cent to trade at US$60.86 per barrel.
Axi chief global market strategist Stephen Innes said higher oil prices were a boon for Malaysia’s fiscal position compared with the government’s 2021 budget assumption of US$42 per barrel for 2021 and US$45-55 per barrel for 2021-23.
“Assuming that it holds, with a US$15 per barrel increase in oil price, that’s an additional RM4.5 billion government revenue versus the estimated RM237 billion for 2021, which is significant to (improve) the fiscal deficit situation.
“This could provide the government with a meaningful wiggle room to pump-prime and fund some of the large infrastructure projects that have been a topic of ongoing discussions in Kuala Lumpur. Indeed, this should eventually see the ringgit trade much stronger this year,” he added.
Meanwhile, the local currency was traded lower against other major currencies today.
It eased against the Singapore dollar to 3.0488/0520 from Monday’s 3.0421/0465 and weakened vis-a-vis the euro to 4.8993/8046 from 4.8874/8942 previously.
The ringgit also depreciated against the yen to 3.8688/8734 from 3.8472/8523 yesterday and slipped against the British pound to 5.5754/5817 from 5.5683/5764.
— Bernama
