KUALA LUMPUR (March 24): The ringgit opened lower against the US dollar on Thursday (March 24) as the greenback continued to strengthen amid uncertainties over energy security in Europe, an analyst said.
At 9am, the local currency was trading at 4.2320/2370 against the greenback from 4.2220/2255 at Wednesday’s close.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the concern arose when the Russian government demanded that settlement for gas transactions will be settled in its currency.
“This created further uncertainties over energy security in Europe that has been heavily reliant on Russia for its gas input. The announcement led to a sharp appreciation of the Russian rouble,” he told Bernama on Thursday.
Mohd Afzanizam said such uncertainties also resulted in further appreciation of the US dollar, with the US dollar index increasing 0.13% to 98.623 points.
“In consequence, the ringgit is expected to remain weak as investors would be uncertain as to how gas transactions in Europe can be completed, and what does it mean to energy security in that region,” he said.
As such, Mohd Afzanizam said the ringgit could stay weak around 4.22 to 4.23 against the US dollar on Thursday.
At the opening, the ringgit was traded mostly lower against a basket of major currencies.
The local unit fell against the Singapore dollar to 3.1173/1212 from 3.1094/1122 on Wednesday and slipped against the British pound to 5.5862/5928 from 5.5849/5895.
The ringgit also eased vis-a-vis the yen to 3.4987/5031 from Wednesday’s close at 3.4893/4924 and depreciated versus the euro to 4.6565/6620 from 4.6446/6485.-BERNAMA