Ringgit under pressure as oil retreats and China cuts interest rates

Ringgit under pressure as oil retreats and China cuts interest rates

At 6 pm, the local currency slid to 4.4570/4595 versus the greenback from Friday’s close of 4.4435/4455. ― Picture by Hari Anggara

Monday, 15 Aug 2022 7:07 PM MYT

KUALA LUMPUR, Aug 15 — The ringgit ended on a bearish note today amid worries over China’s economic slowdown after it cut interest rates unexpectedly today as the country reported weaker-than-expected industrial production and retail sales figures.

At 6 pm, the local currency slid to 4.4570/4595 versus the greenback from Friday’s close of 4.4435/4455.

A trader said that the yuan, with which the ringgit has a strong correlation, was also under pressure after the People’s Bank of China reduced its key policy rates for the first time since January, slashing the one-year medium-term lending facility by 10 basis points to 2.75 per cent.

“It was also reported that China’s surveyed jobless rate for those aged between 16 and 24 jumped to 19.9 per cent in July from 19.3 per cent in the previous month, a new record high.

“In addition, Covid-19 lockdown fears in China also continued to persist,’’ the trader told Bernama.

In the oil market, prices continued to decline following the Organisation of the Petroleum Exporting Countries (Opec) move to lower its oil demand forecast for 2022.

Brent eased US$4.35 (RM19.40) to US$93.80 per barrel and the West Texas Intermediate Crude dropped US$4.03 to US$88.06 per barrel. Meanwhile, the ringgit was mostly higher against a basket of major currencies.

It increased against the Singapore dollar at 3.2379/2402 from 3.2406/2428 at Friday’s close, appreciated versus the British pound to 5.3796/3826 from 5.3975/3999 and rose compared against the euro at 4.5488/5514 from 4.5759/5780.

However, the local unit weakened vis-a-vis the Japanese yen at 3.3393/3415 from 3.3292/3310 previously. — Bernama