KUALA LUMPUR: The ringgit weakened as much as 0.54% against the US dollar late Tuesday to 4.1285, the lowest since Jan 25.
It hit an early intra-day low of 4.1315 to the greenback.
Bloomberg quoted Mizuho Bank Ltd as saying the ringgit’s decline was driven by concern that FTSE Russell may drop Malaysian bonds from its global index, with falling oil prices also weighing on the currency.
The ringgit was also weighed down by headlines from former PM Datuk Najib Razak’s trial relating to state fund 1MDB and Malaysia’s dispute with the European Union over palm oil, according to Vishnu Varathan, head of economics and strategy at Mizuho in Singapore.
“So really, it is a conspiracy of the bears for the ringgit at this moment,” Varathan was quoted saying by Bloomberg.
Earlier, Stephen Innes, managing partner and head of trading SPI Asset Management, said the ringgit caught an updraft on China TSF data while banks loans also came in much higher than expected so there could be upside revaluations to China’s GDP forecasts for 2019.
"I still think the China stimulus will take a while to filter through to the Malaysia economy and the ringgit could remain vulnerable to a shift in Bank Negara policy," he said.