KUALA LUMPUR: The ringgit ended sharply lower against the US dollar Monday in tandem with the local equity market, amidst domestic political realignment and the ongoing Covid-19 outbreak, said an analyst.
At 6 pm, the local note depreciated to 4.2240/2270 against the greenback from Friday’s close of 4.1900/1940.
AxiCorp chief market strategist Stephen Innes said investors could be excused for the lack of inflows after spending 18 months in trade war purgatory, only to emerge, and then get sideswiped, by the Covid-19 outbreak, as well as the latest upheaval in the political landscape.
He pointed out that the turning point for the ringgit also remained less clear as global risk aversion comes to the fore as Covid-19 cases increase exponentially around the world.
“In this environment, foreigners have gone cold on riskier assets in favour of gold, but mostly US Treasuries, which is creating US dollar inflows and supporting the US dollar over more China-sensitive growth proxies like the ringgit,” he added.
Innes said until the market sees a significant increase in people going back to work in China and the People’s Bank of China’s stimulus is paying dividends via ramp-up of domestic production, the ringgit could languish.
At the close, the ringgit was traded lower against other major currencies.
It slipped against the Singapore dollar to 3.0126/0152 from 2.9924/9957 on Friday and declined against the yen to 3.7941/7978 from 3.7504/7550 previously.
The local note retreated vis-a-vis the euro to 4.5678/5728 from 4.5286/5346 and slid against the pound to 5.4464/4520 from 5.4110/4178. – Feb 24, 2020, Bernama
