KUALA LUMPUR: The ringgit eased against the US dollar and other major currencies on Monday as heightened geopolitical risks strengthened the greenback after Brent crude oil prices surged sharply, with the local currency continuing to be affected by the ongoing war in Iran.
At 6 pm, the local currency slipped to 3.9590/9655 against the greenback from Friday’s close of 3.9425/9535.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said Brent crude had shot up to as high as US$118.35 per barrel during the morning session, but later hovered around US$107.91 per barrel after Iran named Mojtaba Khamenei as its new supreme leader.
Crude oil prices surged past US$105 per barrel and briefly peaked at US$108 on Sunday after Mojtaba was named Iran’s new supreme leader following the death of his father Ayatollah Ali Khamenei in a US-Israeli airstrike.
At the time of writing, Brent crude oil price rose 12.16 per cent to US$104.75 per barrel.
"The ringgit continues to be affected by the war in Iran. The appointment of the new supreme leader suggests that the conflict is likely to be protracted,” he told Bernama.
Mohd Afzanizam said fears over global inflation and how central banks would respond had resulted in higher US Treasury yields.
"Obviously, risk aversion has driven market sentiment into a weaker trajectory. Hence, the ringgit is expected to remain weak in the near term,” he said.
At the close, the ringgit traded lower against a basket of major currencies.
It slid vis-à-vis the Japanese yen to 2.4992/5035 from 2.4973/5044 last Friday, eased versus the British pound to 5.2809/2896 from 5.2530/2676 and fell against the euro to 4.5738/5813 from 4.5634/5762 previously.
Meanwhile, the local note traded mixed against its ASEAN peers.
The ringgit appreciated vis-à-vis the Thai baht to 12.3345/3617 from 12.3392/3810 on Friday and gained versus the Philippine peso at 6.65/6.67 from 6.68/6.70.
However, the local note trended lower versus the Singapore dollar to 3.0925/0978 from 3.0779/0867 and decreased against the Indonesian rupiah to 233.5/234.0 from 232.9/233.6 previously. - Bernama
