Wednesday, May 31, 2023
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Ringgit rises against greenback amid US debt ceiling negotiations

ANN/THE STAR – The ringgit improved versus the United States (US) dollar in early trade yesterday amid hopes for an agreement on raising the US debt ceiling.

At 9am, the local note rose to 4.4910/4935 versus the greenback from Monday’s closing rate of 4.4960/4985.

Bank Muamalat Malaysia Bhd Chief Economist Mohd Afzanizam Abdul Rashid said the failure to reach an agreement on the US debt ceiling could easily lead to a risk-off environment, which would hurt emerging market currencies like the ringgit.

Investors closely monitored yesterday’s discussions on the US debt ceiling.

It was reported that US Treasury Secretary Janet Yellen said that the US administration and congressional Republicans were making progress in their negotiations over federal spending and raising the debt limit.

Yellen, however, reiterated that it’s still likely that the US could default on its debt obligations possibly as soon as June 1 if the US Congress doesn’t act. Mohd Afzanizam noted that a slew of China data will be announced today, namely the country’s fixed asset investment, retail sales, and industrial production for April.

“Perhaps this may support the ringgit today as an improving Chinese economy would help sustain global growth, which can have a positive spillover effect on the Malaysian economy,” he said. The ringgit was traded lower against a basket of major currencies.

It depreciated against the Euro to 4.8867/8894 from 4.8863/8890 at the close on Monday, reduced vis-a-vis the British pound at 5.6268/6299 versus 5.6169/6200 and eased against the Japanese yen to 3.3039/3060 from 3.3010/3031 previously.

It rose versus the Indonesian rupiah to 303.2/303.6 from 303.6/304.0 but weakened vis-a-vis the Thai baht to 13.3067/3200 from 13.3045/3174 at Monday’s close.

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