Ringgit hit by uncertainty due to hung Parliament

THE ringgit stayed in the red territory against the US dollar for the whole day as uncertainty due to the hung Parliament and China’s soaring new Covid-19 cases kept investors demotivated in today’s session.At 6pm, the local note slid to 4.5770/5850 against the greenback from last Thursday’s close of 4.5490/5565.

The market was closed last Friday in conjunction with the 15th General Election.

SPI Asset Management MD Stephen Innes said the weaker ringgit was driven by a knee-jerk reaction to the political risk.

In addition, Asia’s risk appetite turned sour after news of lockdowns in several major cities in China. 

The world’s second-largest economy reported the country’s first Covid-19 deaths in nearly six months, raising worries about more strict measures possibly being introduced to curb infections.

‘’China lockdowns push back the reopening narrative wave that the ringgit was riding on last week,’’ he told Bernama.

Innes said although the ringgit reacted negatively to the hung Parliament, in the long term a coalition government could mean more consultative policies and more checks and balances, which would be market positive.

This week, the market will also closely monitor the September Leading Index and October inflation rate to be released on Friday.

Malaysia’s inflation declined to 4.5% in September.

The ringgit traded mostly higher against a basket of major currencies.

It fell compared to the Singapore dollar to 3.3107/3169 from 3.3091/3150 at last Thursday’s close, but appreciated against the euro to 4.6827/6909 from 4.7146/7224, rose vis-a-vis the Japanese yen to 3.2278/2337 from 3.2581/2637 previously, and increased versus the British pound to 5.4036/4131 from 5.4069/4159. TMR/pic by TMR