KUALA LUMPUR – The ringgit is expected to trade between RM4.23 and RM4.24 against the United States dollar next week due to lacklustre sentiment in the global oil market, said Bank Islam Malaysia Bhd economist Adam Mohamed Rahim.
He told Bernama that sentiments will continue to be affected in an already oversupplied oil market with US President Joe Biden urging the Organisation of Petroleum Exporting Countries (Opec) and its allies to boost production quickly in an effort to tame climbing prices.
“On the demand side, Opec left its forecast for oil demand growth in 2021 and 2022 unchanged, while the International Energy Agency cut oil demand for the second half of the year by 550,000 barrels a day due to the worsening progression of the pandemic.”
As such, he said, the lacklustre sentiment of the oil market will have an effect on the ringgit.
Malaysia’s better gross domestic product performance in the second quarter, which expanded 16.1% from -0.5% in Q1, has little effect on the local note versus the greenback.
Bank Negara Malaysia yesterday said the better Q2 performance is mainly supported by improvements in domestic demand and a continued robust exports performance.
Governor Datuk Nor Shamsiah Mohd Yunus said the country’s economic growth for 2021 is now projected at between 3% and 4%, lower than the earlier forecast of between 6% and 7%, largely due to the reimposition of nationwide virus containment measures following a spike in infections.
For the week just ended, the ringgit was mostly lower throughout the week on worries about the high Covid-19 caseload.
On a weekly basis, the ringgit settled at 4.2365/2385 against the greenback from 4.2180/2205 previously.
However, it traded higher against other major currencies in the same period.
It appreciated against the Singapore dollar at 3.1187/1207 from 3.1219/1240, and rose against the British pound at 5.8476/8504 from 5.8685/8720.
It advanced against the euro to 4.9775/9798 from 4.9815/9844, and strengthened vis-a-vis the Japanese yen at 3.8409/8427 from 3.8415/8442. – Bernama, August 14, 2021
