Ringgit Weakens Amid Middle East Tensions and US Tariffs

The ringgit closed slightly lower against the US dollar on July 24 amid rising tensions in the Middle East and the imposition of tariffs by the US on 60 countries, including Malaysia. According to Afzanizam Rashid, chief economist at Bank Muamalat Malaysia Bhd, global growth could slow as tariffs can disrupt supply chains.

Rashid noted that the ongoing blockade in the Strait of Hormuz is exerting upward pressure on crude oil prices, which will lead to higher demand for the US dollar. He added that external risks have become elevated, which could affect the ringgit's value.

Stephen Innes, managing partner at SPI Asset Management, said the ringgit closed with a slight weakening bias due to the US administration's latest tariff measures and a modest hawkish repricing along the Federal Reserve curve. He noted that oil prices are likely to remain the biggest driver and could influence the Fed's policy decision if officials become concerned about energy inflation spreading into other parts of the economy.