KUALA LUMPUR, Dec 13 — The ringgit closed easier against the US dollar on Monday on better buying support for the greenback as investors turned their focus to a number of central bank policy meetings due this week, analysts said.
At 6 pm, the local note stood at 4.2275/2295 against the greenback from 4.2100/2150 at Friday’s close.
Analysts said investors were bracing for a batch of high-profile central banks’ policy meetings this week, including the US Federal Reserve (Fed), the Bank of Japan, the Bank of England and the European Central Bank.
“The Fed’s policy decision would be closely watched as it is expected to signal a faster tapering of its asset purchases and an earlier start to interest rate increase as the economy stays robust, with upbeat employment numbers and high inflation.
“The US annual inflation rate stood at 6.8 per cent in November, accelerating at its highest level since 1982,” said an analyst.
On the other hand, the ringgit’s losses were capped by Malaysia’s better Industrial Production Index (IPI) data for October.
AmBank Research said IPI had started to accelerate in October, logging a 5.5 per cent year-on-year (y-o-y) growth — much higher than the 2.5 per cent y-o-y rise during the previous month.
It said distributive trade was also growing after four months of decline, expanding at 5.4 per cent y-o-y compared with a 2.6 per cent contraction in September.
This was broadly expected as the economy reopened with a high vaccination rate, allowing the economic sector to function properly in the new normal.
“Coupled with pent-up demand, high commodity prices and robust exports, the economy will continue to grow healthily.
“Our in-house model suggests that the economy will expand by 2.9 per cent y-o-y for the final quarter of 2021 and 3.5 per cent y-o-y for the full year,” it said.
Meanwhile, the ringgit also ended lower against other major currencies.
The local note depreciated against the euro to 4.7640/7662 from 4.7497/7554 at Friday’s close and fell against the Singapore dollar to 3.0907/0924 from 3.0815/0854.
It eased versus the Japanese yen to 3.7178/7199 from 3.7034/7081, and declined against the British pound to 5.5993/6020 from 5.5576/5642 previously.
— Bernama
