Selangor Journal

Ringgit eases against US dollar at close on slower IPI growth

KUALA LUMPUR, May 9 — The ringgit ended easier against the US dollar today, dragged by the slower growth pace of Malaysia’s Industrial Production Index (IPI) in the first quarter of 2023 as well as market talk on the latest Overnight Policy Rate (OPR) hike, which could be the last for the year, according to an economist.

At 6pm, the local note eased to 4.4460/4500 versus the greenback from Monday’s closing rate of 4.4360/4380.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the latest IPI data showed that production activities among manufacturers slowed to 2.8 per cent year-on-year growth from 4.0 per cent in the fourth quarter of 2022 and 12.2 per cent in the third quarter of last year.

“Clearly, Malaysia is an open economy, and trade and investment will remain susceptible to a moderation in the external demand,” he told Bernama.

Commenting on the 25-basis point OPR increase, Mohd Afzanizam said Bank Negara Malaysia’s move was seen as the last hike for the year as the central bank may want its monetary policy stance to remain accommodative to growth.

“This perhaps could limit the upside potential for the ringgit in the near term while the prevalence of risk-off mode could play a role too,” he added.

Meanwhile, the ringgit was traded mostly lower against a basket of major currencies.

The local currency improved against the euro to 4.8835/8879 from 4.8960/8982 at yesterday’s close but fell vis-à-vis the British pound to 5.6126/6177 from 5.6084/6110 and eased versus the Japanese yen to 3.2963/2995 from 3.2854/2872.

The local note also traded mostly lower against Asean currencies.

It improved against the Philippine peso at 7.97/7.98 from 8.02/8.03 at Monday’s close.

However, the ringgit declined vis-à-vis the Thai baht to 13.1835/2016 from 13.1184/1302 previously, was lower versus the Singapore dollar at 3.3522/3557 compared with 3.3489/3507 yesterday, and slipped against the Indonesian rupiah to 301.6/301.9 from 301.5/301.8.

— Bernama

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