During the week, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz, in his social media posts, said that Malaysia is not experiencing an economic crisis simply because the ringgit is trading at a low level per against the US dollar. —Photo Reuters
Saturday 17 September 2022 10:32 GMT
KUALA LUMPUR, September 17 – The ringgit is expected to see further declines next week against the greenback around the 4.50-4.60 levels due to a lack of catalysts and ahead of the US central bank’s decision on interest rates, one analyst said.
Amid rising inflation concerns, including in emerging market (EM) economies, investors are holding back buying interest in emerging assets and would remain focused on safe-haven assets such as the US dollar, she said.
The expectation of another interest rate hike by the US Federal Reserve (Fed) at next week’s Federal Open Market Committee (FOMC) meeting is also weighing on the ringgit.
“Ringgit needs a boost to attract investor interest. But now, we think investors could take a wait-and-see approach for the ringgit, until the announcement of the 2023 budget, which is expected to be tabled on October 7, 2022.
“(However,) the Malaysian economy is still doing well, given that the fundamentals are strong and debt levels are manageable,” she told Bernama.
During the week, Finance Minister Datuk Seri Tengku Zafrul Tengku Abdul Aziz, in his social media posts, said that Malaysia is not experiencing an economic crisis simply because the ringgit is trading at a low level per against the US dollar.
He explained that the performance of the ringgit should be viewed globally, and not just in comparison to the US dollar, as the local rating has strengthened against other currencies.
Tengku Zafrul also pointed out that the International Monetary Fund (IMF) has never said that Malaysia has economic problems that would bankrupt the country, but rather was confident in the country’s growth prospects.
Meanwhile, the ringgit hit a new low on Thursday, trading at 4.5340/5365 against the US dollar since the Asian financial crisis, down from 4.4965/4990 at last Friday’s close.
During the shortened trading week, the local currency also traded mostly higher against a basket of major currencies.
It rose against the British pound to 5.2214/2242 from 5.2249/2278 and improved against the euro to 4.5317/5342 from 4.5361/5386 this week.
The ringgit rose against the Japanese yen to 3.1647/1666 from 3.1670/1690 but eased against the Singapore dollar to 3.2238/2261 from 3.2189/2209 a week earlier.
Markets were closed on Friday for the Malaysia Day celebration. — Bernama