THE ringgit continued to depreciate against the US dollar today, dragged down by market volatility that was triggered by the recent steep US interest rate increase and the expectation of more hikes to come, said a dealer.

At 10.39am, the local currency fell to 4.598 against the greenback from last Friday’s 4.58.

The ringgit opened at 4.595 against the dollar today.

Bank Islam Bhd chief economist Firdaos Rosli said the US dollar index emerged stronger, hitting 113.19, on the expectation of more aggressive tightening as flagged by the US Federal Reserve during its recent September meeting.

“As such, the local note breached the 4.57 level on the back of the strengthening greenback following the latest move by the US central bank to hike the interest rate by 75 basis points, lifting the fractional flow reserve target rate from 2.25%-2.50% to 3%-3.25%,” he told Bernama.

He also said that the ringgit will likely continue its downward trend versus the US dollar, ranging from RM4.58 to RM4.61 in the week, driven by sentiments rather than fundamentals.

Meanwhile, the ringgit was higher against a basket of major currencies.

The local note strengthened versus the Singapore dollar to 3.2073 from 3.2152 at last Friday’s close, appreciated against the Sterling to 4.8601 from 5.0985, and rose vis-a-vis the euro to 4.4412 from 4.4710 previously.

It also performed better against the Japanese yen at 3.1975 from 3.213 previously. – Bernama, September 26, 2022.