At 6.01pm, the local currency eased to 4.6470/4.6500 against the greenback from last Friday’s close of 4.6360/4.6390.
SPI Asset Management managing partner Stephen Innes said that in the wake of last week’s UK risk asset meltdown, markets were not functioning well and demand for risky Asia assets was mute.
“Surprisingly the ringgit has not strengthened even as the oil price is up 2% and the possibility that the Organization of the Petroleum Exporting Countries (Opec) will cut production to put a floor under oil prices,” he said.
“Exporter retention of US dollar and Employees Provident Fund (EPF) overseas investments remain the primary drag outside of the hawkish Federal Reserve (Fed),” he told Bernama.
Meanwhile, Bank Islam Bhd chief economist Firdaos Rosli said the ringgit trading this week would be contingent upon the upcoming release of the US non-farm payrolls report and the ongoing speeches by Fed officials.
He added that the market would also focus on key takeaways from the UK’s Conservative Party conference, the purchasing managers’ index (PMI) survey data for the world’s major economies and the Opec meeting.
“The ringgit movement will also take cues from the upcoming Budget 2023 announcement on Friday and developments surrounding an early 15th general election.
“This will indicate inflation expectations in the coming months and signal Bank Negara Malaysia’s (BNM) appetite for another 25 basis points overnight policy rate (OPR) hike in early November,” he said.
Given these conditions, Firdaos expects the ringgit to trade moderately within the 4.644 to 4.655 range this week.
Today, BNM governor Nor Shamsiah Mohd Yunus said there was no need to hoard or frontload US dollar purchases as the ringgit’s current depreciation was due to the strength of the US dollar.
She also said corporate Malaysia could help in maintaining orderly market conditions by taking actions which did not exacerbate the situation.
The governor said BNM would ensure that the country’s onshore foreign exchange market remained liquid and businesses could be assured that all their foreign currency needs would be efficiently fulfilled.
The ringgit traded mixed against a basket of major currencies.
The local currency slipped against the British pound to 5.1963/5.1996 from 5.1728/5.1762 at last Friday’s close and eased slightly versus the Singapore dollar to 3.2354/3.2379 from 3.2343/3.2368.
It appreciated against the Japanese yen at 3.2015/3.2040 from 3.2103/3.2126 and rose vis-a-vis the euro to 4.5355/4.5384 from 4.5428/4.5458 last Friday.