Ringgit Tumbles on Warsh Rate Hike Warning

The Malaysian ringgit (MYR) ended lower against the US dollar on its first trading day in September, following Federal Reserve Chair Kevin Warsh's recent speech at the Jackson Hole Symposium.

Rising expectations of a US interest rate hike have put pressure on the MYR, with the currency falling to 4.0370/0410 against the USD by 6pm local time from last Friday's close of 4.0230/0270.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid attributed the MYR's decline to Warsh's speech, which he said has had a significant impact on the currencies market.

'Markets are focusing on his concern over inflation which would imply that the monetary tightening is almost inevitable in the near term especially during the Federal Open Market Committee's (FOMC) two-day meeting beginning Sept 15,' Dr Afzanizam said.