Ringgit weakest currency in Asia this year

Ringgit has recorded a decline of almost six per cent in the first half of 2023 thus leading in the fall of the currency among other Asian currencies, while the country's and Thailand's equities have the worst performance in the mixed market.

According to a report by new agency Reuters yesterday, most Asian currencies had recovered from early losses, with the Philippine peso and Thai baht being in the front with a 0.4 per cent gain respectively.

For the first half of 2023, ringgit recorded the biggest drop among the developing Asian countries where it had dropped 5.8 per cent due to capital outflows.

It last traded at 4.670 against the United States (US) dollar, nearing its lowest drop within eight months.

"Ringgit recorded a low performance in Asia due to continued foreign equity outflows. However, an improvement in terms of growth could change the sentiment and we could see ringgit strengthen around 4.60 to 4.70 against US dollar in the second half of 2023," said Macro DBS Bank strategist Wei Liang Chang.

The local stock market fell as much as 7.7 per cent in the same period and was among the worst peforming country in the region.

Bank Negara Malaysia (BNM) will hold a meeting next week to decide on the Overnight Policy Rate (OPR).

Analysts from Barclays predicted that the central bank will maintain its benchmark rate.

Meanwhile, the Thai baht had also dropped by almost three per cent this year and was currently at its all-time low in seven months.

It remains under pressure as the Southeast Asia's second largest economy is struggling to elect a new Prime Minister.

"The main reason (of weak Asian currencies against US dollar) is because Federal Reserve (Fed) chairman Jerome Powell continues to hint at high interest rate rhetoric, signaling at least two more rate hikes," said Asia ANZ senior strategist Irene Cheung.

Meanwhile, China yuan also dropped to 7.2615 per dollar yesterday which was also at its weakest since Nov 10.