The ringgit traded lower against the US dollar today, but is expected to remain steady as the greenback continues its downside weakened on ambiguous minutes from the latest Federal Reserve meeting.
According to Mohd Afzanizam Abdul Rashid, chief economist at Bank Islam, the ringgit is expected to continue its uptrend, supported by the firmer crude oil prices. The Brent crude is really looking up as the prices have marched higher to USD48 per barrel.
He told Bernama that the rise in crude oil prices will always be associated with Malaysia’s economy with respects to the government’s revenue and the oil and gas industry. These will be the key factors in supporting the ringgit in the immediate term.
The talks of the discovery of the Covid-19 vaccine alongside the possibility of the Organisation of the Petroleum Exporting Countries (Opec) delaying its plan to increase their production next year have also fuelled hope that the global economic recovery will be sustainable next year, Afzanizam commented.
However, he noted that profit-taking could seep in since the ringgit has appreciated quite considerably. All eyes will be on the Budget 2021 approval from members of Parliament. There could be a chance that the ringgit could experience some weaknesses in light of the uncertainty on the budget (vote).
At 9am, the local currency stood at 4.0850/0880 against the greenback compared with Wednesday’s close of 4.0835/0890. While against the Singapore dollar, it stood at 3.0503/0537 compared with Wednesday’s close of 3.0408/0454.