KUALA LUMPUR: The ringgit continued its downtrend to close slightly lower against the US dollar today, as buying sentiment towards the local unit deteriorated after the government cut economic growth projections and dropped plans to balance the budget by 2020.
At 6pm, the ringgit edged down to 4.1560/1600 versus the greenback from 4.1550/1580 on Thursday.
Citing the the Mid-Term Review of the 11th Malaysia plan, FXTM Research Analyst Lukman Otunuga said Malaysia’s economic growth Is expected to range between 4.5% and 5.5% from 2018 to 2020, a slower pace than the earlier 5-6% projection for 2016-2020.
“With the World Bank also trimming the nation’s gross domestic product (GDP) growth forecast this year to 4.9% from the 5.4% earlier, the outlook looks discouraging,” he told Bernama.
Echoing Otunuga’s view, Oanda Head of Trading Asia-Pacific Stephen Innes said the GDP growth and forecast cut and balanced budget scrap were not exactly a ringing endorsement for Malaysia’s financial position.
“With capital gains taxes and other consumption taxes on the horizon, it’s not to difficult to figure out why Malaysia’s equity market remains under pressure, and hence, weighed on the ringgit’s performance,” he said.
At the close, the ringgit traded mostly higher against other major currencies, except the Japanese yen.
It advanced against the British pound to 5.4132/4205 from 5.4530/4586 on Thursday, rose against the Singapore dollar to 3.0129/0169 from 3.0163/0196, while against the euro, appreciated to 4.7619/7674 from 4.7891/7929.
Vis-a-vis the Japanese yen, the ringgit retreated to 3.6982/7027 from 3.6920/6953 on Thursday. — Bernama