THE ringgit opened marginally lower against the US dollar due to better demand for the greenback on the expected increase of the US bond yields, said an analyst.

At 9.04am, the local note stood at 4.5475/5520 versus the greenback from yesterday’s closing rate of 4.5470/5515.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the latest message from US Treasury Secretary Janet Yellen indicated the debt ceiling impasse could be an economic catastrophe as the government would not be able to repay its financial commitments.

“This might result in bond yields rising as credit risks for the US government would escalate.

“This will continue to exert weaker sentiment in the foreign exchange market, leading to higher demand for the US dollar, as investors seek refuge against extreme volatility,” he told Bernama.

Afzanizam said the US Dollar Index remains elevated, with the greenback-ringgit rate yesterday surpassing the immediate resistance level of 4.5491.

“The next resistance level would be at 4.6257, based on technical readings.

“But the ringgit is already at an oversold position and the US dollar-ringgit rate will remain in a narrow range of around 4.55 as we believe there could be some compromise from the US debt ceiling stalemate,” he said.

The ringgit traded firmer against a basket of major currencies.

It strengthened vis-a-vis the British pound to 5.6548/6604 from 5.6578/6634 yesterday, up against the euro to 4.9154/9203 from 4.9189/9238, and was higher against the Japanese yen at 3.2810/2845 from 3.2973/3008.

The local note traded mixed against other Asean currencies.

It was unchanged versus the Indonesian rupiah at 305.3/305.8 from yesterday’s close, rose to 3.3773/3811 from 3.3799/3835 against the Singapore dollar, and gained vis-a-vis the Thai baht to 13.1835/2019 from 13.1950/2138.

The ringgit traded marginally lower against the Philippine peso to 8.16/8.17 against 8.14/8.16 from yesterday’s close. – Bernama, May 23, 2023.