Ringgit Hits 24-Year Low Against US Dollar
After opening at its lowest level against the US dollar since the Asian financial crisis in 1998, the Malaysian ringgit continues to plummet
As more investors shift their assets to safe havens as a result of uncertain global economic outlooks, the slip continues to work in line with lower oil prices as well.
At 9.05am today, 14 September, the local currency slid to 4.5200/5220 against the greenback (US dollar) from the 4.5070/5085 at yesterday's close. This comes after the ringgit slid to 4.5010/5035 last Wednesday, 7 September.
According to ActivTrades trader Dyogenes Rodrigues Diniz, the US Consumer Price Index (CPI) showed a higher-than-expected inflation percentile
According to Diniz, the index stands at 8.3% as opposed to the forecasted 8.1%.
"The higher reading left investors wondering about how big an interest rate hike we could see at the next Federal Reserve meeting on [21 September]. Prior to the release of the CPI data, the market was predicting a 0.5 [to] 0.75 increase, but now many have raised their forecast to a 0.75 [to] 1.0 per cent hike," he said in a statement to Bernama.
Diniz had noted that the markets have responded strongly to the data, thereby resulting in another strong appreciation of the US dollar against other currencies.
Nonetheless, Finance Minister Tengku Datuk Seri Zafrul Tengku Abdul Aziz stated that Malaysia is not experiencing an economic crisis
Referencing the low trading level between the ringgit against the US dollar, he explained that the local currency should be looked at holistically against other currencies, and not just the US.
The ringgit has continued to soar against other major currencies around the globe. The unit rose against the Singapore dollar to 3.2153/2174 from Tuesday's close of 3.2320/2333, and also appreciated against the Japanese yen to 3.1282/1301 from 3.1690/1703.
It has also climbed against the British pound at 5.1989/2012 from 5.2768/2786 yesterday, and increased against the Euro to 4.5105/5125 from 4.5818/5833 beforehand.
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