Ringgit closes lower amid US tariff reduction, 13MP developments
The US announced today that it is imposing a reduced 19% tariff on Malaysian imports.
The tariffs take effect seven days after 12:01am on Aug 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 Afzanizam 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% on Malaysia means that the impact would be minimised from the previous tariff rates of 25%.
'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,' 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 Anwar Ibrahim in Parliament on July 31.
It is expected 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.
At 6pm, the local currency fell to 4.2750/4.2815 versus the US dollar from yesterday's close of 4.2650/4.2730.
Meanwhile, at the close, the ringgit ended higher against major currencies.
It rose against the Japanese yen to 2.8407/2.8452 from 2.8443/2.8498 at the close yesterday, appreciated versus the British pound to 5.6208/5.6293 from 5.6426/5.6532, and gained against the euro to 4.8752/4.8826 from 4.8766/4.8857 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 13.0058/13.0319 from 13.0448/13.0753.
The local currency fell against the Philippine peso to 7.35/7.36 from 7.31/7.33 and weakened against the Singapore dollar to 3.2907/3.2960 from 3.2889/3.2953.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Free Malaysia Today
4 hours ago
- Free Malaysia Today
KTMB reaffirms commitment to Johor on ETS expansion
KTMB said it is working with the relevant contractors and authorities to ensure its ETS service from Segamat to Kluang will be ready as soon as possible, with trial runs currently under way. PETALING JAYA : Keretapi Tanah Melayu Bhd (KTMB) is committed to fully expanding its Electric Train Service (ETS) to Johor as soon as possible. However, the company said it will only be done in phases, after ensuring the safety and reliability of the service to the southern sector, Bernama reported. 'KTMB's primary responsibility is to ensure safety, reliability and readiness before opening any new segment to the public,' it said in a statement today. KTMB said it is working with the relevant contractors and authorities to ensure the next segment of its service, from Segamat to Kluang, will be ready as soon as possible, with trial runs currently under way. The three phases for the ETS extension in Johor are to Segamat, Kluang, and JB Sentral in Johor Bahru. The service currently runs from Padang Besar in Perlis to Segamat. 'The transport minister (Loke Siew Fook) had announced last March, when launching the service to Segamat, that the extension in the southern sector will be done in phases, depending on several critical technical milestones and regulatory approvals,' KTMB said. The company said it wanted to reassure the public of its commitment to delivering a safe, modern and transformative rail service for the southern corridor, following recent reports on the service being extended to Johor Bahru. KTMB said the ETS service to Segamat has been operating successfully since March this year, offering improved travel options and stimulating local economic activity. 'KTMB wishes to thank all passengers, local stakeholders and the public for their patience and continued support. We remain fully committed to making ETS travel to the south a success,' it said.
Malay Mail
4 hours ago
- Malay Mail
Biofuel battle: Why India is shielding its farmers in the face of US trade pressure
MUMBAI, Aug 3 — US President Donald Trump on Thursday slapped a 25 per cent tariff on Indian goods after prolonged talks that got bogged down over access to India's labour-intensive agricultural sector, which New Delhi has pledged to protect. Why is India opposing the products the US is lobbying for? The United States is pressing India to open its markets to a wide range of American products, including dairy, poultry, corn, soybeans, rice, wheat, ethanol, fruits and nuts. While India is willing to provide greater access for US dry fruits and apples, it is holding back on corn, soybeans, wheat, and dairy products. A key reason for this resistance is that most US corn and soybeans are genetically modified (GM), and India does not permit the import of GM food crops. GM crops are widely perceived in India as harmful to human health and the environment, and several groups affiliated with Prime Minister Narendra Modi's ruling Bharatiya Janata Party (BJP) are opposing their introduction. The commercial cultivation of a high-yielding GM mustard variety that India developed itself is currently not allowed due to an ongoing legal battle. Like GM crops, dairy is also a highly sensitive issue, as it provides a livelihood for millions of farmers, including many who are landless or smallholders. The dairy industry helps sustain farmers even during erratic monsoon seasons, which can cause significant fluctuations in crop production. In India, where a large proportion of the population is vegetarian, food choices are strongly influenced by cultural and dietary preferences. Indian consumers are particularly concerned that cattle in the US are often fed animal by-products — a practice that conflicts with Indian food habits. A farmer sprinkles fertiliser in a paddy field on the outskirts of Amritsar on July 5, 2025. — AFP pic Why are agricultural imports politically charged? India is self-sufficient in most farm goods, with the exception of vegetable oils. After liberalising cooking oil imports over three decades ago, the country now has to import nearly two-thirds of its supply to meet demand. India does not want to repeat this mistake with other basic foods, which account for nearly half of its consumer price index. Though agriculture makes up just 16 per cent of India's nearly US$3.9 trillion economy, it is the lifeblood for nearly half the country's 1.4 billion people. Four years ago, this powerful voting bloc forced Modi's government into a rare retreat on a set of controversial farm laws. Some in power fear a flood of cheaper US imports would bring down local prices and hand opposition parties an opportunity to sharpen its attack on the government. New Delhi is also worried that a trade deal with the US could also force it to open its agricultural sector to other countries. Farmers work in an onion farm near power-generating windmill turbines of Adani Green Energy at Ahmedabad-Narayan Sarovar state highway near Nakhatrana village in the western state of Gujarat November 29, 2024. — Reuters pic How does farming in India and the US differ? The vast disparity in the scale of farming makes it difficult for Indian farmers to compete with their US counterparts. The average Indian farm is 1.08 hectares, compared to 187 hectares in the US For dairy farmers, the difference is even more dramatic — a small herd of two or three animals versus hundreds or more in the US Many Indian farmers also rely on traditional, unmechanised techniques, while American agriculture has developed into a highly efficient, tech-driven industry. Why is India hesitant to use US ethanol in its biofuel programme? One of India's key goals with its Ethanol Blended Petrol (EBP) programme is to reduce energy imports and support domestic farmers by using sugarcane and corn for biofuel production. Indian companies have invested heavily in new distilleries, and farmers have expanded corn cultivation to meet the rising demand. India recently achieved its ambitious target of a 20 per cent ethanol blend in petrol. With state assembly elections approaching in Bihar — a major corn-producing state in the east — allowing US ethanol imports would lower local corn prices. This would probably anger farmers and turn them against the BJP ahead of the election and also undermine the growing distillery sector. — Reuters
Malay Mail
5 hours ago
- Malay Mail
Fadillah: Malaysia could go nuclear within 10 years, if public gives green light
KUCHING, Aug 3 — The government is studying the possibility of implementing nuclear energy projects in Peninsular Malaysia and Sabah due to the high demand for stable energy in both regions, says Deputy Prime Minister Datuk Seri Fadillah Yusof. Fadillah, who is also the Minister of Energy Transition and Water Transformation (PETRA), said the suitability of locations near water sources such as rivers, seas or large lakes was a key consideration in the ongoing feasibility study for nuclear plant cooling systems. 'For Peninsular Malaysia and Sabah, nuclear projects are viable because what we need now is a constant energy source. 'In Sarawak, there is no issue because hydropower already contributes almost 70 per cent, while in Peninsular Malaysia and Sabah, hydropower resources are not as abundant due to their heavier reliance on gas and diesel, which are still based on non-clean sources,' he told reporters after officiating the MUSCS Pickleball Arena here today. He said no final decisions had been made regarding the technology, location or capacity to be used, as the government was still conducting a comprehensive study coordinated by MyPower Corporation, the implementing agency of the National Nuclear Energy Programme. Fadillah said in addition to technical requirements, the study would also examine the most suitable technology, development of local expertise, safety aspects, environmental impact, and the overall financing capability of the project. 'All of these aspects must be carefully assessed. Only when we are satisfied and the public accepts the use of nuclear energy will we proceed to finalise the implementation… our projection is that the earliest it could be implemented is within the next 10 years,' he said. He added that the government was also exploring new technologies such as small modular reactors (SMRs) and was planning several working visits abroad to identify the best, safest, and most cost-effective technologies for Malaysia. 'That's why I visited Russia and France, and God willing, I will also visit South Korea, Japan, China, and finally the United States,' he said. Yesterday, PETRA said in a statement that nuclear energy development was being studied as a clean, stable and competitive energy source for Malaysia's future, with a gradual approach based on International Atomic Energy Agency (IAEA) guidelines. — Bernama
