FXTM market analyst Han Tan said the uncertainties surrounding the make-up of the new government and its potential policy offerings would only serve to further dampen Malaysian assets that had already been battered by COVID-19 fears.
"The near-term outlook for the ringgit is expected to remain clouded by this confluence of policy and economic uncertainties, as the risk aversion evident in global markets dampens the appeal of most Asian currencies amid the COVID-19 outbreak,” he told Bernama. "Another 25-basis point reduction to the benchmark interest rate may result in the ringgit accommodating more weakness over the nea -term, although the softer currency would in turn help alleviate Malaysia’s economic pressures,” he added.
For the week just ended, the ringgit ended sharply lower against the US dollar at 4.2120/2180 compared with 4.1900/1940 on the previous Friday.Negative sentiment was capped by the announcement of the 2020 Economic Stimulus Package worth RM20 billion by interim Prime Minister Tun Dr Mahathir Mohamad to cushion the impact of COVID-19 on the domestic economy.It declined against the Singapore dollar to 3.0215/0269 against 2.9924/9957 previously and fell against the pound to 5.4343/4438 from 5.
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