Covid-19, oil price drop put pressure on ringgit to end lower

KUALA LUMPUR: The ringgit has continued to slide against the US dollar, reaching its lowest level since May 2017 as oil prices continue to decline and Covid-19 continues to grapple global markets.

At 6pm today, the local note breached 4.3480/3530 against the greenback compared with yesterday’s close of 4.3030/3080.

An analyst said that the ringgit is expected to continue its decline as Malaysia is directly impacted by the worsening Covid-19 pandemic.

“The oil market has also taken its toll as benchmark Brent Crude has reached below US$35 per barrel, triggering a huge economic impact on oil-reliant countries such as Malaysia,“ she said.

As at 6pm, Brent Crude fell 11.37% overnight to US$31.41 per barrel.

She added that countries globally have taken various measures to mitigate the economic aftermath of Covid-19, which is expected to be worse than the 1997 Financial Crisis, including announcing economic stimulus and relief packages for the people as well as businesses.

The US Federal Reserve on Sunday reportedly announced a 100 basis-point emergency interest rate cut to between zero and 0.25% to mitigate impacts on the US economy from the Covid-19 pandemic.

Against other major currencies, the ringgit was traded lower.

It slipped against the Singapore dollar to 3.0482/0528 from 3.0260/0312 at Monday’s close, and decreased versus the Japanese yen to 4.0792/0850 from 4.0613/0672 yesterday.

The local unit reduced against the British pound to 5.2911/1985 from 5.2711/2876, and weakened vis-a-vis the euro to 4.8228/8297 from 4.8155/8228 previously. - Bernama