KUALA LUMPUR – The ringgit surged against the US dollar today as the greenback slipped further in continuation of its downtrend over the past few days.
At 6pm, the local currency reached 4.1080/1130 versus the greenback compared with last Friday’s close of 4.1275/1325.
Bank Islam Malaysia Bhd chief economist, Mohd Afzanizam Abdul Rashid, attributed the ringgit’s sharp appreciation to the US election results, which saw Joe Biden being chosen as the country’s 46th president.
“This would mean a bigger fiscal stimulus is in the works and perhaps international trade-friendly policies would be implemented.
“This would lend credence to the global economic recovery narrative from the International Monetary Fund (IMF), which has projected world Gross Domestic Product growing by 5.2 % in 2021 after an estimated contraction of 4.4 % this year,” he said.
To some degree, Malaysia’s sizeable Budget 2021 allocation could also help support the ringgit, he noted, adding that market participants would, however, pay close attention to the ongoing debate in Parliament.
All in all, the ringgit had performed favourably and the incoming economic data, such as export figures, the Leading Index, Industrial Production Index and unemployment rate, had been positive to the ringgit, said Mohd Afzanizam.
He added that the speed bump, nonetheless, could come from the recent implementation of the Conditional Movement Control Order, which may have an impact on the pace of the economic recovery during the fourth quarter and could result in some profit-taking activities along the way.
The ringgit was higher against other major currencies at the close today.
It rose against the Singapore dollar to 3.0586/0630 from last Friday's close of 3.0624/0668 and improved against the euro to 4.8770/8850 from 4.8923/8995.
The local note increased against the British pound to 5.3922/4004 from 5.4231/4313 and strengthened vis-a-vis the yen to 3.9599/9659 from 3.9918/9978 last Friday. – Bernama, November 10, 2020
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