Ringgit falls to new 24-year low – 4.60 to US dollar

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The ringgit continued its downtrend against the US dollar in today’s closing as reduced investors’ risk appetite pushed the ringgit to a new 24-year low.

At 6pm, the local currency depreciated to 4.6030/6045 against the greenback from 4.5775/5800 from last Friday’s closing.

UOB Kay Hian Wealth Advisors Sdn Bhd head of wealth research and adviser Mohd Sedek Jantan said the ringgit is expected to continue its decline going forward as the greenback continues to strengthen on the back of interest rate hikes.

“However, we expect the local currency to recover once the performance of the US dollar begins to deteriorate as the US Federal Reserve (Fed) slows the rate of interest rate hikes.

“One thing to keep in mind is that the strengthening of the US dollar, caused by the increases in US interest rates, has resulted in a decline not only of the ringgit but other currencies as well,” he told Bernama.

He noted that regionally, the ringgit had outperformed the British pound, Australian dollar, Singapore dollar, and Japanese yen.

“In terms of currency volatility, the ringgit is more stable than the currencies of South Korea, Australia, Japan, Germany, and the United Kingdom.

“Export growth has helped to strengthen the currency, where in August, it hit a 16-month high of 48.2% year-on-year,” he said.

Throughout this week, the ringgit is anticipated to trade between 4.580 and 4.630 to the US dollar.

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

The local note went up versus the Singapore dollar to 3.2054/2069 from 3.2130/2152 at Friday’s close, and appreciated against the Japanese yen to 3.1950/1965 from 3.2091/2113.

It rose vis-a-vis the euro to 4.4405/4420 from 4.4686/4710 and went up against the British pound to 4.9197/9213 from 5.0957/0985 last Friday.