23-5-2023 (Kuala Lumpur) U.S. bond yields are projected to increase as market sentiment leans towards risk aversion, driving up demand for the US dollar. The Malaysian ringgit experienced a slight decline against the US dollar, reaching a record low of 3.3981, approaching the critical 3.40 level.
According to market data from “Bloomberg,” the exchange rate of the Malaysian ringgit against the Singapore dollar exhibited a downward fluctuation within a narrow range. The market opened at 3.3791, slightly better than the previous day’s closing rate of 3.3823 (22nd). However, it slipped to 3.3981 in the afternoon, surpassing the previous year-end record low of 3.3951. By 5 pm, the ringgit was trading at 3.3972 against the Singapore dollar.
Against the US dollar, the ringgit commenced trading at 4.5538, lower than the previous day’s closing rate of 4.5470 (22nd). Subsequently, under the weight of a robust US dollar, the Malaysian ringgit experienced frequent declines, plunging to as low as 4.5712. At 6 pm, the ringgit stabilized at 4.5700 against the US dollar.
Mohamed Afanizan, the Head of Economic and Market Analysis at Bank Muamalat, shared insights with Bernama, stating that US Treasury Secretary Yellen expressed concerns regarding the potential economic repercussions of the debt ceiling impasse. Failure to meet financial obligations, including debt repayments, could lead to an escalation in the US government’s credit risk. Consequently, higher bond yields are anticipated, prompting investors to seek safe havens amidst extreme market volatility. This ongoing sentiment dampens the foreign exchange market and amplifies the demand for the US dollar.
