EXTERNAL pressures continued to weigh on the ringgit, causing it to close lower against the US dollar on the last trading day for the week.

The local note ended easier despite encouraging domestic developments such as the Consumer Price Index (CPI) coming in lower and the inflation rate going down after peaking at 4.7% in August last year.

At 6pm, the ringgit ended at 4.6760/6805 against the greenback, compared with 4.6525/6580 yesterday.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the ringgit was severely affected by external events, in particular, the unexpected bank rate increase by the Bank of England of 50 basis points along with a hawkish stand by the US Federal Reserve.

“Malaysia’s CPI came in lower than expected at 2.8% in May and the inflation rate has been improving,” he said.

“The 125 basis points overnight policy rate (OPR) hike since March last year has started to have an impact on inflation.”

He said at the current juncture, the real rate of interest for Malaysia has turned positive at 0.2%, hence, there is no urgency for Bank Negara Malaysia to raise the OPR again in the near term.

Meanwhile, the ringgit strengthened against a basket of major currencies.

At the close, the local note was marginally higher versus the British pound to 5.9469/9527 from yesterday’s closing of 5.9496/9567, strengthened against the Japanese yen to 3.2645/2680 from 3.2776/2817 and appreciated vis-a-vis the euro to 5.0781/0830 from 5.1182/1243.

However, the ringgit weakened against other Asean currencies except against the Singapore dollar.

The ringgit went up against the Singapore dollar to 3.4568/4604 from 3.4697/4740 previously, marginally lower versus the Thai baht at 13.2765/2950 from 13.2720/2934, fell further vis-a-vis the Indonesian rupiah to 311.7/312.2 from 311.3/311.9, and depreciated against the Philippine peso to 8.38/8.40 from 8.36/8.38. – Bernama, June 23, 2023.