Selangor Journal
A man counts US dollar banknotes at a currency exchange shop in Beirut, Lebanon March 23, 2021. — Picture by REUTERS

Ringgit falls as slower china growth boosts US dollar

KUALA LUMPUR, Jan 17 — The Malaysian ringgit ended the day lower as renewed fears about Covid-19 could dampen the momentum of the global recovery after slower Chinese economic growth data boosted demand for the US dollar.

At 6pm, the local currency was trading at 4.1815/1835 against the greenback compared with 4.1765/1795 at Friday’s close.

Bank Islam Bhd chief economist Mohd Afzanizam Abdul Rashid said clearly the zero Covid-19 policy implemented by China has taken its toll when its economic growth for the final quarter of 2021 decelerates to 4.0 per cent from 4.9 per cent during the September quarter.

In addition, China said its retail sales growth moderated sharply to 1.7 per cent year-on-year in December from 3.9 per cent in the prior month.

‘’Already, China’s central bank has cut its benchmark interest rate, that is the one-year Medium-Term Lending Facility by 10 basis points to 2.85 per cent. Following this, the US dollar has gained further strength,’’ he said.

Mohd Afzanizam said the divergence in the path of monetary policy between the US and China could also pose a great challenge to emerging market currencies in the near term.r

Domestically, market players are closely watching Bank Negara Malaysia’s Monetary Policy Committee’s (MPC) first meeting of the year for further clues on interest rate and the economy.

The meeting will be held on January 19 and January 20.

Overall, the local note was traded higher against a basket of other major currencies.

The ringgit rose versus the Singapore dollar to 3.1020/1039 from Friday’s close of 3.1045/1070 and appreciated against the Japanese yen to 3.6523/6544 from 3.6675/6704.

It strengthened against the British pound to 5.7207/7234 from 5.7339/7380 and increased vis-a-vis the euro to 4.7774/7796 from 4.7846/7880 previously.

— Bernama

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