Political uncertainty: Financial news

 Affected by political uncertainty, Ringgit opens lower against US dollar

Amidst uncertainty the stock market has fluctuated and Malaysia Ringgit had opened lower against the dollar than expected. Malaysian ringgit fell to one-year low against the greenback on Monday as political uncertainty and high COVID-19 infections dragged market sentiment.

The ringgit, which traded at between 4.2338 and 4.2445 against the U.S. dollar (USD) on Monday, was last traded at 4.2400 at 5:00 p.m. local time, the lowest since July 2020.

In the past year, Malaysia Ringgit depreciated 5.37 percent against the USD.




OANDA Asia Pacific's senior market analyst Jeffrey Halley said the weakening of the ringgit on Monday might be due to the resignation of Muhyiddin Yassin as Malaysian prime minister, as this will deepen the political uncertainty that has been dogging the ringgit of late.

Additionally, he said, Malaysia's ongoing COVID-19 woes have been dampening sentiment for some time. Covid has caused economic problems globally, and this is the same for Malaysia. 

"I expect the ringgit to test 4.2500 against the USD and then 4.3000 imminently. Looking further out, I expect the ringgit to move above 4.3000 against the USD as I do not expect Malaysia's political situation to resolve itself anytime soon," he told Xinhua.

Muhyiddin on Monday stepped down as Malaysia's prime minister as he has lost the majority support in the parliament. Malaysia's King Sultan Abdullah Sultan Ahmad Shah appointed him as the caretaker prime minister until a suitable replacement is determined.

Bursa Malaysia’s performance yesterday shows that investors were not spooked by Muhyiddin Yassin’s resignation as the prime minister, says Mr Razak.

In a Facebook post, the former prime minister noted that despite Bursa’s 2.21-point dip, this was actually lower than that of neighbouring stock markets – with the ringgit even ending the day marginally higher against the US dollar.

“Despite several media reports that the Malaysian stock market plunged badly yesterday, the Bursa Malaysia index actually did not move significantly,” Najib said.

“This is proof that investors are not that affected with the prime minister’s resignation.”

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