Ringgit Closes Lower Against Greenback On BOJ Interest Rate Increase

By K. Naveen Prabu

KUALA LUMPUR, June 16 (Bernama) -- The ringgit closed lower against the US dollar on Tuesday as investors remained cautious following the Bank of Japan's (BOJ) decision to raise interest rates. 

At 6 pm, the local note fell to 4.0665/0700 versus the greenback from 4.0485/0525 at Monday's close.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the BOJ's decision to raise its policy rate prompted investors to remain cautious despite declining crude oil prices.

The Japanese central bank increased its policy rate by 25 basis points to 1.00 per cent, as widely expected, marking the highest level since 1995, he noted.

“The decision was premised on rising inflation and improving economic growth conditions, which make the extremely accommodative monetary policy increasingly inappropriate,” Mohd Afzanizam told Bernama. 

At the close, the ringgit was lower against a basket of major currencies.

It depreciated against the Japanese yen to 2.5360/5384 from 2.5283/5309 at Monday's close, weakened versus the British pound to 5.4552/4599 from 5.4355/4409 yesterday, and slipped vis-a-vis the euro to 4.7175/7216 from 4.6987/7033.

The local note also eased against regional currencies.

It weakened against the Thai baht to 12.5027/5192 from 12.4294/4474 at Monday's close, slid versus the Indonesian rupiah to 229.3/229.7 from 228.5/228.9 yesterday, dropped vis-a-vis the Philippine peso to 6.74/6.75 from 6.69/6.70, and declined against the Singapore dollar to 3.1722/1752 from 3.1580/1613.

-- BERNAMA