Ringgit slips as US Dollar hits 20-year high

KUALA LUMPUR • The ringgit fell back to its lowest level since January 2017 against the US dollar as the greenback rallied to hit a 20-year high against major currencies after US Federal Reserve (Fed) Chair Jerome Powell emphasised that higher interest rates will likely continue for some time. 

The remarks came amid signs that the world’s largest economy’s inflation has not shown any marked signs of a downward trend.

At 6pm, the local currency eased to 4.4885/4915 against the greenback from last Friday’s close of 4.4655/4675.

An analyst told Bernama that the market is now projecting a 75-basis point US rate hike during the Fed’s September meeting, with the rate ranging at 3.75%-4% by the end of the year.

At home, Malaysia’s Consumer Price Index increased by 4.4% year-on-year to 127.9 in July 2022 compared to 122.5 in the same month last year. The inflation for the January to July 2022 period increased by 2.8% compared to the same period in 2021.

Minister in the Prime Minister’s Department (Economy) Datuk Seri Mustapa Mohamed said the high inflation rate trend is a global phenomenon that is also experienced by many countries following the increase in production input and fuel prices.

However, he said Malaysia’s inflation rate is among the lowest in the world.

“The rate in July 2022 was lower than the UK (10.1%), eurozone (8.9%), the US (8.5%), Thailand (7.6%), Singapore (7%), the Philippines (6.4%), South Korea (6.3%), and Indonesia (4.9%),” he said.

Meanwhile, the ringgit was traded mostly higher against a basket of major currencies, except versus the euro, whereby it declined to 4.4705/4735 from last Friday’s close of 4.4668/4688.

The ringgit was higher against the Singapore dollar at 3.2100/2126 from 3.2140/2159, advanced vis-a-vis the British pound to 5.2439/2474 from 5.2831/2855 and increased versus the Japanese yen to 3.2385/2409 from 3.2619/2636 last Friday. — Bernama/pic by TMR