The ringgit weakened against the US dollar
The ringgit continue weakened against the US dollar after foreign investors pull out of emerging markets following the US Federal Reserve hinted at possible interest rate hike by the end of this year .
The ringgit was quoted at 4.4032 against the dollar at 12:16, changing hands at 4.4058 at 0:46 . Before that , the exchange rate at 4.4065 to reach a fresh stage . At current levels, the ringgit is one step closer to the level of 4.7125 on January 9, 1998 before Bank Negara Malaysia pegged the ringgit to the US dollar at 3.8000 on September of that year .
The ringgit’s depreciation amid Outflow of foreign capital from Target Emerging Markets Last Week. Foreign funds sell assets ringgit amidst a combination of factors like the fall of oil prices and political uncertainty as 1Malaysia Development Berhad (1MDB) a state owned company undergoing investigation.
Reuters quoted the chairman of the Federal Reserve Janet Yellen said on Thursday as he expects the US central bank raised the Chapter Start Interest Rate As At End of Year Remains stable inflation and the US economy is strong enough to Boost Jobs.
Today, MIDF Amanah Investment Bank Bhd has been writing the weekly fund flow report: “consequence died in World Malaysia air plug Weight Emerging Markets weeks on release.”
“Investors which classified as ‘foreign’ sold heavily on Bursa last week. Foreigners unloaded RM1.27 billion net in the Open Market (which is not included in the External Market Deals) even though it is a holiday-shortened week.
“It was the fifth week in this year where the total investment exit value exceeding RM1 billion. It exceeds inward investment value recorded in the previous week’s total of RM685 million, which implies that any equity fund makes its way to Malaysia at present is very uncertain in nature. ”
Meanwhile, crude oil prices declined. Brent crude oil fell to US $ 48.16 a barrel while US oil traded lower at US $ 45.29.
Issues affecting Ringgit strength
The strength of the ringgit depending on the price of crude oil which is a major commodity in the economy and government revenues. 1MDB has been in the spotlight. Bank Negara governor Tan Sri Zeti Akhtar Aziz recently said the ringgit will recover once the issues related to 1MDB was completed.
1MDB expressed disappointment over the comments Zeti that 1MDB has been a major factor contributing to the weakening ringgit.
1MDB said the ringgit weakened along with other currencies due to the factor of cheaper crude oil, expectations of higher interest rates in the US and concerns over slower growth in emerging economies.
– The Edge Markets, September 28, 2015.