Ringgit continues downtrend amid weaker global economy

KUALA LUMPUR: The ringgit continued its downtrend today amid a weaker global economy due to lingering concerns over the Covid-19 outbreak.

As at 9.04am, the local unit weakened to 4.1680/1710 against the greenback from yesterday’s close of 4.1600/1620.

IHS Markit, in its research note, said unlike during the similarly-alarming Severe Acute Respiratory Syndrome (SARS) pandemic, China’s role in the global economy this time around has significantly increased.

“China is currently the second-largest economy in the world after the US. It is the second-largest importer of manufacturing goods amounting to US$1.674 trillion in 2019, which accounts for 9.1% of global imports and the largest exporter with US$2.524 trillion in 2019, which is responsible for 13.7% of global exports.

“It is a key country for industrial production and is important for global value chains. China’s role globally and in the south Asian region is currently much greater than in 2003 and the region’s economies are more interlinked,” it said.

Companies around the world, especially those from the manufacturing and automotive sector have been adversely impacted due to the lack of supply parts mainly from China.

The local note was traded mostly higher against a basket of other major currencies.

It increased slightly against the Singapore dollar to 2.9876/9908 from 2.9885/9910 yesterday and strengthened against the pound to 5.3880/3923 from 5.4101/4143.

It rose vis-a-vis to the yen to 3.7485/7522 from 3.7729/7761 yesterday but declined against the euro to 4.5056/5105 from 4.4932/4970.