Ringgit weakens as Strait of Hormuz attacks weigh on sentiment

KUALA LUMPUR, May 26 — The ringgit closed lower against the US dollar today, pressured by external developments following reports of US and Israeli attacks on Iranian vessels in the Strait of Hormuz, which dampened regional market sentiment.

At 6pm, the ringgit eased to 3.9660/9705 against the greenback from yesterday’s close of 3.9510/9550.

According to news report, the attacks had resulted in several casualties among the Iranians.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid told Bernama that such development suggests that the ongoing effort for peace negotiation would be futile, risking a prolonged military conflict in West Asia.

At the time of writing, Brent crude were trading higher by 2.80 per cent to US$98.83 per barrel.

“It is like a back and forth situation and it leads to higher market uncertainties.

“In the meantime, rising inflationary pressures following the oil shock is likely to shape the global inflation rate and, as such, cautious sentiment among the traders would limit the ringgit’s appreciation in the near term,” said Mohd Afzanizam.

Nonetheless, he said the ringgit remained relatively resilient on a year-to-date basis, ranking among the region’s second-best performing currency despite recent volatility.

He also said the Indonesian rupiah and Indian rupee were currently under greater pressure due to their twin deficit positions, making both economies more vulnerable to oil price shocks.

At the close, the ringgit also traded easier against a basket of major currencies.

It weakened versus the Japanese yen to 2.4917/4947 from 2.4860/4887 at yesterday’s close, depreciated against the euro to 4.6172/6225 from 4.5998/6044 yesterday, and declined vis-a-vis the British pound to 5.3470/3530 from 5.3311/3365 previously.

The local currency was mostly lower against regional peers except the Thai baht, rising to 12.1485/1675 from 12.1640/1816 at yesterday’s close.

The ringgit was lower versus the Singapore dollar to 3.1038/1075 from 3.0932/0966 at yesterday’s close, ticked down against the Philippine peso to 6.44/6.45 from 6.43/6.44, and was easier versus the Indonesian rupiah to 222.8/223.2 from 222.6/223 from yesterday’s close.

The market will be closed tomorrow in conjunction with the Hari Raya Aidiladha public holiday. — Bernama

المصدر: Malay Mail