Ringgit Weakens as Oil Prices Rise Ahead of Fed Decision

The Malaysian ringgit declined against major currencies on Tuesday due to higher crude oil prices and expectations of a US Federal Reserve rate hike next week. According to Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, elevated crude oil prices could strengthen the case for a Fed rate hike.

The ringgit closed lower against the dollar, with an exchange rate of 4.0605/0640, compared to Monday's close of 4.0440/0485. It also weakened against other major currencies, including the euro, pound, and yen.

Dr Afzanizam noted that market sentiment was anxious about the Fed's next move in the near term, which contributed to the decline of the ringgit. The US dollar-yen exchange rate hovered around 153 yen as expectations of a Bank of Japan rate hike gathered momentum.