Ringgit slips against US dollar as new tariffs take effect despite reduced rate
At 6pm, the local note fell to 4.2750/2815 versus the US dollar from yesterday's close of 4.2650/2730.
The US announced today that it is imposing a reduced 19 per cent tariff on Malaysian imports. The tariffs take effect seven days after 12.01am on August 1, with goods already in transit granted a seven-day grace period to ease the immediate impact on supply chains.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that despite this positive development, traders remained cautious, and the weakness of the ringgit was somewhat mitigated by the news of the tariff reduction.
He said that the reciprocal tariff of 19 per cent on Malaysia means that the impact would be minimised from the previous tariff rates of 25 per cent.
'There could also be an opportunity for Malaysia to continue to discuss and negotiate with the US, and along the way, the country could get an improved deal. This could be ringgit-positive in the medium term,' Mohd Afzanizam told Bernama.
He emphasised that the 13MP is anticipated to have a positive impact on the ringgit in the mid to long term. Under the 13MP, development expenditure has been increased to RM430 billion, which is expected to boost domestic demand and encourage investment activities, ultimately supporting Malaysia's gross domestic product growth.
The 13MP was tabled by Prime Minister Datuk Seri Anwar Ibrahim in Parliament on July 31. It aims to drive sustainable growth based on value creation across all sectors.
Of the RM430 billion allocation, Anwar said more than half, or RM227 billion, will be channelled to the economic sector as the main pillar of the country's growth.
Meanwhile, at the close, the ringgit ended higher against major currencies.
It rose against the Japanese yen to 2.8407/8452 from 2.8443/8498 at the close on Thursday, appreciated versus the British pound to 5.6208/6293 from 5.6426/6532, and gained against the euro to 4.8752/8826 from 4.8766/8857 previously.
The ringgit was mixed against regional peers.
It improved against the Indonesian rupiah to 258.8/259.4 from yesterday's 259.1/259.7 and edged higher versus the Thai baht to 13.0058/0319 from 13.0448/0753.
The local note fell against the Philippine peso to 7.35/7.36 from 7.31/7.33 and weakened against the Singapore dollar to 3.2907/2960 from 3.2889/2953. — Bernama
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