KUALA LUMPUR: The ringgit closed lower against the US dollar on Thursday as expectations of a possible US Federal Reserve (Fed) interest rate hike later this year boosted demand for the greenback.
At 6 pm, the local note fell to 4.1145/1195 against the greenback from 4.0665/0700 at Tuesday's close.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said expectations of a 25-basis-point interest rate hike by the Fed this year continued to support the US dollar.
"This is despite the Fed's forecast for lower federal fund rates of 3.6 per cent in 2027 and 3.4 per cent in 2028, compared with 3.8 per cent in 2026.
"Hence, we believe there appears to be a knee-jerk reaction among traders as the Fed is also abandoning forward guidance in its accompanying statement,” he told Bernama.
At the close, the ringgit was mostly lower against a basket of major currencies.
It depreciated against the Japanese yen to 2.5588/5620 from 2.5360/5384 at Tuesday's close and slipped versus the euro to 4.7222/7280 from 4.7175/7216. However, it strengthened against the British pound to 5.4476/4542 from 5.4552/4599 previously.
Against regional currencies, the local note was lower.
It weakened against the Thai baht to 12.5611/5809 from 12.5027/5192 at Tuesday's close, depreciated versus the Indonesian rupiah to 231.2/231.5 from 229.3/229.7 previously, eased against the Philippine peso to 6.79/6.80 from 6.74/6.75 and declined against the Singapore dollar to 3.1898/1939 from 3.1722/1752. - Bernama
