BERNAMA – The ringgit closed lower yesterday as rising geopolitical risks spurred the buying of safe haven assets such as the greenback, nevertheless it still emerged as a global best performer against the US dollar in a three-month period from July 2 to October 2.
Analyst attribute the ringgit’s recent strong performance to the implementation of economic reforms in Malaysia, along with political stability that has led to positive reviews by credit rating agencies and global investment banks, resulting in more inflows from foreign funds.
At 6pm, the local note slipped to 4.1730/1790 versus the greenback compared to yesterday’s close of 4.1530/1610.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit had been the best performing currency in the third quarter due to anticipation of the United States (US) interest rate cuts, which happened in September. This has made the prospect for the return of investment in ringgit assets look better, amid anticipation of the narrowing gap between Malaysia and US interest rates.
Afzanizam noted the risk-off mode in financial markets globally today, not just in Malaysia, as traders and investors turned cautious after missiles attacks were launched at Israel.
“Hence, the safe haven currency, namely the US dollar, will be a highly sought after currency. This will continue to shape market sentiments in the near term and the ringgit would continue to remain weak against the greenback,” he told Bernama.
He said investors will also closely monitor upcoming US economic data going forward, especially the ISM services PMI today and the US non-farm payroll data tomorrow.
The ringgit also slid against a basket of major currencies.
