Ringgit sell-off continues for 9th straight day

The ringgit settled lower for the ninth straight day today as concerns over the United States (US) raising interest rates soon continued to bolster demand for the safe-haven US dollar.

Sell-off in the domestic currency market saw the ringgit trading at a 16-month low of 4.2400 earlier.

At 6pm, the ringgit stood at 4.2370/2400 against the greenback from 4.2295/2300 at yesterday’s close.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the main factor still revolved around the US Federal Reserve's decision on the tapering of asset purchases, which was likely to be accelerated, while a possible interest rate hike in 2022 could happen much earlier.

"Additionally, the increase in Covid-19 cases and the subsequent measures to curb the virus spread in Europe also has provided a strong support to the US dollar," he told Bernama.

It was also reported a new Covid-19 variant was found in South Africa. The heavily mutated variant is known as B.1.1.529.

"The ringgit has weakened considerably during the week," he noted.

Domestically, Malaysia's consumer price index rose to 2.9 percent, higher than consensus projections.

In addition, the Department of Statistics Malaysia said key indicators showed a promising recovery momentum towards the fourth quarter of the year and into 2022.

"Perhaps this positive development helped the ringgit reduce its losses slightly," an analyst said.

The local note was traded mostly lower vis-a-vis a basket of major currencies, except the Singapore dollar against which it rose to 3.0893/0920 from 3.0933/094 at yesterday's close.

It dropped versus the British pound to 5.6403/6443 from 5.6392/6399 yesterday, fell against the Japanese yen to 3.7131/7160 from 3.6667/6674, and slipped against the euro to 4.7713/7747 from 4.7463/7469.

- Bernama

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