KUALA LUMPUR, July 3 — The ringgit will continue to trade under pressure versus the US dollar next week as currency traders attentively track developments in the US as well as wait for Bank Negara Malaysia’s (BNM) monetary policy committee meeting next Thursday.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said US dollar/ringgit has been gyrating on the weaker side this week amid the appreciation of US dollar index to 92.632 points on Friday.
“As the case for US quantitative easing tapering gaining momentum, the value of the US dollar is expected to rise, leading to weaker emerging market currencies including the ringgit. Perhaps, the ringgit would stay at a range of around RM4.16 next week,” he told Bernama.
Commenting on the week just ended, Mohd Afzanizam said data such as the Malaysia’s Purchasing Managers Index fell drastically to 39 points in June after sustaining more than 50 points in the past two months as the implementation of the Full Movement Control Order (FMCO) is taking a serious toll on manufacturing activities.
“It has adverse impact on the ringgit,” he added.
Meanwhile, another economist, Adam Mohamed Rahim said a key event that investors in Malaysia would be looking out for is BNM’s monetary policy committee meeting, where the central bank might maintain the current Overnight Policy Rate of 1.75 per cent.
“A rate hike in 2021 is premature due to the surge in inflation being partly due to the low base nature and with much of the increase coming from energy prices.
“Moreover, the country is still in the midst of recovery with current cases staying above 5,000 per day so the current OPR is deemed as appropriate at this juncture to support the economy,” he added.
Meanwhile, the ringgit strengthened against other major currencies.
Against the Singapore dollar, the local unit appreciated to 3.0778/0818 from 3.0964/0980 a week earlier, the local note rose against the British pound to 5.7188/7256 from 5.7781/7802, and against the euro, it strengthened to 4.9171/9230 from 4.9627/9645 in the preceding week.
It also rose to 3.7303/7351 from 3.7526/7540 previously.
— Bernama
