KUALA LUMPUR, June 17 — The ringgit lost its ground against the US dollar at the opening today, as the greenback surged after the US Federal Reserve (Fed) hinted to raise interest rates in 2023.
At 9am, the local note fell to 4.1360/1385 versus the greenback, erasing 0.5 per cent, or 205 basis points (bps), from 4.1155/1180 at Wednesday’s close.
Describing the Fed’s rate hikes signal as a “hawkish surprise”, a dealer said the news had caused capital outflows from emerging markets, including Malaysia, hence, making their currencies depreciated against the greenback.
Nevertheless, he viewed that the Fed’s decision to maintain the interest rates at the current level of 0-0.25 per cent during the two-day Federal Open Market Committee (FOMC) meeting, which ended early today, as a widely expected move.
Although the ringgit was hampered by the US interest rate news, the dealer said the retreat, however, was capped by the Malay Rulers’ decision that there was no necessity to place the country under the state of Emergency rule after August 1, 2021, hence, boosting investor confidence in the country.
Keeper of the Rulers’ Seal Tan Sri Syed Danial Syed Ahmad, in a statement, said the Malay Rulers, who attended a special meeting at Istana Negara on Wednesday, also supported Yang di-Pertuan Agong Sultan Al-Abdullah Al-Mustafa Ri’ayatuddin Billah Shah’s call for Parliament to reconvene as soon as possible.
The Malay rulers said the check and balance mechanism between the executives, legislative and judiciary must be respected.
At the opening, the ringgit was firmer against a basket of major currencies.
It rose against the pound to 5.7801/7836 from 5.8090/8126 at Wednesday’s close and strengthened against the euro to 4.9582/9612 from 4.9896/9927 yesterday.
The local unit was higher against the Singapore dollar at 3.0953/0974 versus 3.1032/1053 and improved vis-a-vis the yen to 3.7342/7368 from 3.7431/7453. — Bernama
Source: Malay Mail
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