Reports indicated that the federal government is on the brink of a shutdown unless the US Congress can reach a funding agreement before the start of the new fiscal year on Oct 1.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said a US government shutdown would mean limited services, which, if prolonged, could undermine economic growth.

“The US Congress needs to agree on the spending programme by the end of September to avoid a government shutdown.

“Hence, the thesis for US interest rate cuts has gained momentum from such an event, resulting in a weaker US dollar,” he told Bernama today.

At 6pm, the local currency rose to 4.2150/4.2200 against the greenback compared with Friday’s close at 4.2200/4.2250.

At the close, however, the ringgit was lower against a basket of major currencies.

It eased to 2.8365/2.8400 against the Japanese yen from 2.8171/2.8206 at Friday’s close, slipped to 5.6612/5.6679 against the British pound from 5.6345/5.6412, and declined to 4.9387/4.9446 versus the euro from 4.9281/4.9340.

The local currency was mostly lower against Asean currencies.

It fell to 3.2664/3.2706 vis-à-vis the Singapore dollar from 3.2630/3.2671 and depreciated to 13.0649/13.0857 against the Thai baht from 13.0587/13.1069 previously.

The ringgit also edged lower against the Indonesian rupiah at 252.6/253.1 from 252.1/252.5, and was flat versus the Philippine peso at 7.25/7.26 from 7.25/7.27 previously.