May 29 , 2003

Ringgit Depreciates against Major
Currencies on Weak US Dollar

KUALA LUMPUR, May 29 (Bernama) -- The ringgit depreciated against major currencies and most regional currencies for the period May 1 to 23 in line with the weakening of the US dollar, Bank Negara Malaysia (BNM) said.
The ringgit depreciated against the euro by 4.8 percent, pound sterling by 2.3 percent and yen by 1.8 percent, it said when releasing its "Monetary and Financial Developments" Wednesday night.
It said that against regional currencies, the ringgit depreciated in the range of 1.8 percent-4.2 percent, while appreciating against the peso by 0.5 percent.
BNM said that concerns over the weakness of the US economy resulted in market expectations of a possible lowering of US interest rates.
In contrast, the euro resumed its upward trend, rising to a new four-year high on May 21, supported by higher yields on euro denominated assets relative to US dollar assets.
In April, the ringgit depreciated against major currencies namely the euro, pound sterling and yen by 2.6 percent, 1.2 percent and 0.1 percent, respectively in tandem with the movement of the US dollar in the international foreign exchange markets, BNM said.
It said that the US dollar weakened following outflows into higher-yielding currencies, in particular, the euro.
The ringgit depreciated against most regional currencies in the range of 0.1 percent to 3.5 percent, while appreciating against the Singapore dollar by 0.5 percent. Regional currencies gained from a relief rally towards the end of April when the World Health Organisation (WHO) noted that the worst of the Severe Acute Respiratory Syndrome (SARS) outbreak was over in some countries.
The Korean won appreciated due to strong stock market performance, technical factors, and the softening tension in the conflict in North Asia.
The Singapore dollar, however, weakened following market speculation that the authorities would tolerate a weaker currency in the light of less favourable economic conditions.