KUALA LUMPUR (May 31): The ringgit opened lower against the US dollar today, as investors adopt a cautious measure ahead of total lockdown across the country starting tomorrow, an analyst said.
At 9.01am, the local currency declined to 4.1420/1500 against the greenback from Friday’s close of 4.1320/1350.
Bank Islam Malaysia Bhd economist, Adam Mohamed Rahim said the sudden announcement of a two-week full movement control order (FMCO) phase one (June 1-14) on Friday may cause some short-term local market volatility.
“Investors may be concerned about the economic impact from the lockdown and therefore, will tend to shift towards currencies of countries which are more stable, especially in terms of handling the COVID-19 crisis,” he told Bernama.
The National Security Council on COVID-19 management has decided to implement a total lockdown on the social and economic sectors (first phase) nationwide beginning June 1, under which all sectors will not be allowed to operate, except for essential economic and service sectors.
The decision was reached after taking into account the recent COVID-19 situation in Malaysia, with daily cases exceeding 8,000 and active cases surpassing 70,000.
Meanwhile, the Ministry of International Trade and Industry (MITI) on Sunday announced that 18 manufacturing and manufacturing-related services sectors are allowed to operate under the FMCO.
Thirteen of the sectors are allowed to operate at 60 per cent workforce capacity, while the remaining five are permitted to operate with 10 per cent workforce.
Against other major currencies, the local note was also traded lower at opening.
The ringgit eased slightly against the Singapore dollar to 3.1293/1366 from Friday’s close of 3.1213/1238 and weakened vis-a-vis the euro to 5.0495/0597 from 5.0344/0385.
It also depreciated against the yen to 3.7727/7803 from 3.7598/7629 and was lower against the British pound at 5.8742/8859 from 5.8604/8651.-BERNAMA