KUALA LUMPUR, Oct 21 — The ringgit is expected to trade sideways next week as the ongoing geopolitical tension in the Middle East remains a crucial factor for the currency market, an economist said.
Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the main concern for market players was whether the condition would worsen, which could lead to a shift to safe-haven currencies.
“It remains to be seen whether the prevailing market condition will improve next week, but suffice to say, volatility is going to remain elevated.
“As such, expect the currency market to remain guarded next week,” he told Bernama, adding that the local note was expected to trade within the range of 4.75 to 4.77 against the US dollar in the coming week.
Nevertheless, he added that latest macroeconomic data could provide support to the ringgit despite the uncertainties over the currency market and external demand.
Malaysia’s inflation rate continued to decelerate to 1.9 per cent in September, while the advance gross domestic product growth estimate for the third quarter of 2023 came in at 3.3 per cent, up from 2.9 per cent in the second quarter, according to the Department of Statistics Malaysia.
On a Friday-to-Friday basis, the ringgit weakened against the US dollar to 4.7655/7700 from 4.7260/7305 a week earlier.
The local unit also traded lower against other major currencies.
It depreciated vis-à-vis the British pound to 5.7777/7831 from 5.7615/7670 a week earlier, fell against the euro to 5.0462/0510 from 4.9760/9807 previously, and slipped versus the Japanese yen to 3.1781/1813 from 3.1582/1615.
Similarly, the ringgit traded mostly lower against its Asean peers.
It appreciated against the Indonesian rupiah to 300.1/300.7 from 301.3/301.7 last week.
However, the local currency declined versus the Singapore dollar to 3.4731/4767 from 3.4522/4559 at the previous Friday’s close, went down against the Thai baht to 13.0504/0681 from 12.9810/9995, and eased against the Philippine peso to 8.38/8.40 from 8.32/8.33.
— Bernama
