Ringgit Tumbles on Fed Hike Expectations

The Malaysian ringgit closed lower against the US dollar on its first trading day in September, following hints of an interest rate hike from the Federal Reserve.

The currency fell to 4.0370/0410 against the greenback at 6pm, down from last Friday's close of 4.0230/0270.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid attributed the decline to Federal Reserve Chair Kevin Warsh's recent speech at the Jackson Hole Symposium.

Warsh expressed concerns over inflation, implying that monetary tightening is likely in the near term, particularly during the Federal Open Market Committee's (FOMC) two-day meeting beginning on September 15.