KUALA LUMPUR: The ringgit ended the week on a lower note, tracking the weakening Asian currencies led by the South Korean won following the jump in the Covid-19 cases in the republic.
At 6pm, the local note lost 100 basis points to close at 4.1900/1940 against the greenback from Thursday’s close of 4.1800/1840.
AxiCorp’s chief market strategist Stephen Innes said South Korea’s number of confirmed Covid-19 cases had more than tripled in two days, and the country is now seen as a hotbed for the outbreak.
“Thus, the negative impact on the South Korean economy is set to continue, as anxiety is creeping back into play amid the spike in Covid-19 infections outside of China.
“This is raising alarm bells across the region, making tourism-affected-currencies like the Singapore dollar and the ringgit to bear the brunt too,” he said.
Xinhua news agency reported today that South Korea has 52 more confirmed Covid-19 cases, raising its total number of infected persons to 156.
The number of Covid-19 infections in the country had spiked in just three days after 20 new cases were reported on Wednesday and 53 more cases on Thursday, said Xinhua.
Meanwhile, FXTM market analyst Han Tan said with the ringgit dropping by more than 2% against the greenback so far this year, the US dollar’s surge of late could mean more pain for regional currencies over the near term, as markets try to come to grips with the potential economic toll from Covid-19.
“Malaysia’s Consumer Price Index, which rose to 1.6% in January, shows that inflationary pressures remain manageable.
“This may allow Bank Negara Malaysia to further ease its policy settings should the need arise, depending on the breadth and the depth of the economic impact from the virus outbreak,” he said in a note today.
At the close, the ringgit was traded lower against other major currencies.
It slipped against the Singapore dollar to 2.9924/9957 from 2.9849/9894 on Thursday and declined against the yen to 3.7504/7550 from 3.7328/7367 yesterday.
The local note retreated vis-a-vis the euro to 4.5286/5346 from 4.5140/5191 and slid against the pound to 5.4110/4178 from 5.3926/3990 yesterday. – Feb 21, 2020, Bernama
