KUALA LUMPUR, Mar 20 (Bernama): The Ringgit is expected to trade in a tight range with a downside bias between 4.19 and 4.21 against the US Dollar this week as the ongoing war in Ukraine could potentially have an impact on market sentiment, an analyst said.

Bank Islam Malaysia Bhd’s Chief Economist, Mohd Afzanizam Abdul Rashid, however, said intermittent appreciation of the ringgit is also possible given that the price of Brent crude oil remained at high levels of over $100 per month. barrel.

He said that with the clear marker and advice from the US Federal Reserve (Fed) on raising interest rates, it looked like the market had become more certain and convincing that the economic recovery had gone rather well. .

The US Federal Open Market Committee (FOMC) decided on Wednesday to raise the federal funds rate by 25 basis points, bringing the benchmark interest rate to 0.50%.

“However, tail risks that have low probability but high impact, such as the war in Ukraine, could potentially influence market sentiments,” he told Bernama.

Meanwhile, the Regional Comprehensive Economic Partnership (RCEP) Agreement officially entered into force for Malaysia on Friday, paving the way for the country’s integration into the world’s largest free trade agreement involving 15 countries, with a total population of over 2.2 billion.

Mohd Afzanizam said this could give a boost to the local market as the trade pact will allow better access to new markets.

“At the same time, it allows our companies to diversify their sources of raw materials, thereby mitigating the risk of over-concentration in any one country.

“It could also incentivize local players to upgrade their skills and production capacity to compete with RCEP member countries,” he said.

On a weekly basis, the ringgit was slightly higher at 4.1930/1975 against the greenback from 4.1940/1975 a week ago.

The local currency was exchanged against a basket of major currencies from Friday to Friday.

It rose against the Japanese yen to 3.5259/5300 from 3.5858/5891 and fell against the pound to 5.5100/5159 from 5.4828/4874.

The local unit depreciated against the euro to 4.6370/6420 from 4.5991/6030 and depreciated against the Singapore dollar to 3.0924/0960 from 3.0802/ 0832 a week earlier. – Bernama