Ringgit retreats on falling oil prices

KUALA LUMPUR: The ringgit opened lower against the greenback this morning due to falling crude oil prices amid US President Joe Biden's administration's decision on a record-breaking release of crude oil reserves to tame prices, said an analyst.

At 9 am, the local currency was trading at 4.2100/2140 against the greenback from 4.2025/2055 at Thursday’s close.

It was reported that the US government will withdraw one million barrels per day of oil from the Strategic Petroleum Reserve for a period of six months in a bid to lower fuel prices and allay fears of shortages after the Russian invasion of Ukraine.

At the same time, the Russian government also insisted that payment for gas import will be in roubles or else it will cut the supplies cut, Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid told Benama.

At the time of writing, benchmark Brent crude oil slipped 4.88 per cent to US$107.91 per barrel.

Mohd Afzanizam said the first quarter of 2022 has been very volatile and the military conflict, which began on Feb 24, has added further dimension to market uncertainties.

"It was unsettling for the market, leading to pressure for the safe demand to prevail," Mohd Afzanizam said, adding that the US dollar index (DXY) rose 0.53 per cent to 98.312 points as forex investors were seeking refuge against market uncertainties.

In the meantime, the reopening of Malaysia's international borders today would mean economic activities are likely to be more lively going forward and it should help accelerate domestic demand.

As such, the ringgit should remain lackluster today and possibly move in a narrow range, Mohd Afzanizam said.

At the opening, the ringgit was traded mostly mixed against a basket of major currencies.

The local unit depreciated against the British pound to 5.5303/5355 from 5.5158/5197 on Thursday and fell versus the Japanese yen to 3.4477/4513 from 3.4472/4502 previously.

The ringgit rose against the euro to 4.6592/6636 from 4.6698/6732 at yesterday's close, and remained unchanged against Singapore dollar at 3.1033/1065 from 3.1033/1060 previously. - Bernama