KUALA LUMPUR, May 11 — The ringgit slid by 110 basis points against the US dollar today as cautious sentiment prevailed after the announcement of Malaysia’s first quarter of 2021 (Q1 2021) gross domestic product (GDP) results earlier, coupled with the surging Covid-19 cases and the nationwide movement control order (MCO) 3.0.
At 6pm, the local note was traded at 4.1160/1210 against the greenback from Monday’s close of 4.1050/1100.
Malaysia recorded a GDP contraction of 0.5 per cent in Q1 2021, a sign of recovery from the -3.4 per cent recorded in the preceding quarter, with improvement seen in all economic sectors.
SPI Asset Management global managing partner Stephen Innes said the new mobility restrictions continue to cloud the country’s economic outlook for the second half of 2021, despite the GDP being better than analysts’ expectations.
“The rise in community Covid-19 cases which triggered the latest MCO will delay recovery, hence traders will need a bit of convincing that the epidemic curve is flattening before buying the local unit bullishly again,” he told Bernama.
The Health Ministry said Malaysia recorded 3,973 new Covid-19 cases and 22 deaths over 24 hours up to noon today.
According to Bank Negara Malaysia (BNM), Malaysia’s GDP growth is likely to remain in the range of 6.0 per cent to 7.5 per cent in 2021 despite the implementation of MCO 3.0.
The central bank also said the ringgit is expected to remain exposed to periods of heightened volatility as uncertainties remain on the momentum of the global and domestic economic recovery.
The local note depreciated by 3.5 per cent against the US dollar in Q1 2021, mainly due to the strengthening of the greenback, which also resulted in a broad-based weakening of other advanced and emerging market currencies.
Meanwhile, the local note also traded lower against other major currencies today.
Against the Singapore dollar, the ringgit depreciated to 3.1027/1085 from Monday’s close of 3.0979/1033 and fell against the euro to 5.0071/0140 from 4.9925/0998 previously.
It had also decreased vis-a-vis the British pound to 5.8171/8259 from 5.7839/7922, and eased against the yen to 3.7814/7863 from 3.7740/7797 yesterday.