by BERNAMA / pic by MUHD AMIN NAHARUL
KUALA LUMPUR – The ringgit fell against the US dollar at the opening today, owing to global geopolitical tensions, but an economist believes that the ongoing Russia-Ukraine crisis will provide support for the local currency in the future.
At 9 am, the local currency fell to 4.1880/1905 versus the greenback from Wednesday’s close of 4.1830/1860.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said it remains to be seen how the conflict could be resolved but the clear winner is commodity prices, which will head further north.
“Commodity exporting countries should benefit from higher revenue while exerting more upward pressure on inflation,” he told Bernama.
Mohd Afzanizam said key commodities such as Brent crude and crude palm oil (CPO) would help support the Malaysian economy with CPO currently trading at more than RM6,000 per metric tonne.
“This will boost rural areas income which later would translate into spending. As such, the ringgit should be well supported at the prevailing level of RM4.18 today,” he added.
Meanwhile, the ringgit was traded mostly lower against a basket of other major currencies.
It rebounded against the Singapore dollar to 3.1071/1091 from 3.1114/1141 at the close yesterday, marginally lower vis-a-vis the British pound at 5.6668/6702 from 5.6885/6925, and gained against the euro to 4.7241/7269 from 4.7481/7515.
However, the local currency eased versus the yen to 3.6449/6471 from 3.6352/6381 previously.