‘Ringgit to stay volatile until January’

UNCERTAINTIES: Currency will continue to trade between 4.3 and 4.5 against US dollar, says MIDF

THE ringgit will continue to be volatile until the third week of January, affected by external factors, especially the uncertainties over the United States market.

MIDF Amanah Investment Bank Bhd chief economist Dr Kamaruddin Mohd Nor said by then, the ringgit would continue to trade at a range-bound of between 4.3 and 4.5 against the greenback.

“There is nothing major as far as the currency market is concerned as it has already priced in the expected rate hike by the US Federal Reserve in the second week of next month.

“But until the currency market is given the clarity about the US domestic policy, including its fiscal and trade stimulus, the ringgit will continue to be vulnerable to these external developments,” he said.

The ringgit continued to trade lower yesterday, recording another historical one-year low against the US dollar, as the greenback rallied on expectations of a hike in US interest rates next month, said dealers.

At 4pm yesterday, the ringgit declined against the greenback to 4.4653 from 4.4642 recorded at closing on Thursday.

The currency was lower against other major currencies but remained almost unchanged against the Singapore dollar.

Meanwhile, Australia’s Macquarie Group and Australia and New Zealand Banking Group have agreed to pay fines amounting to US$11 million (RM49.12 million) for trying to manipulate the benchmark rate of the ringgit in 2011.

A source told Business Times yesterday that following the development in Australia, Bank Negara expected more central banks to come forward and help curb any “illegal trading of ringgit” happening in their respective countries.