Ringgit strengthens against US dollar as US debt tops US$40t

KUALA LUMPUR, Aug 20 — The ringgit continued to strengthen against the US dollar on Thursday, as US national debt passed the US$40 trillion mark for the first time, exerting downward pressure on the greenback. The ringgit closed 140 pips higher at 4.0425/0470 against the US dollar, compared to Wednesday's close of 4.0565/0610. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the size of the US public debt had recently come under scrutiny, with the US Treasury Department actively intervening in the treasury markets to curb excessive Treasury yields.

"The US Federal Reserve's hesitance to raise the Federal Funds Rate during the upcoming September meeting, due to the 30-year US Treasury yields hovering around 5.22 percent, could also be influencing traders' sentiment," Dr Rashid explained to Bernama. Throughout the day, the ringgit performed poorly against other major currencies, weakening against the Japanese yen, British pound, euro, Indonesian rupiah, Thai baht, and Singapore dollar, while strengthening slightly against the Philippine peso.