What role do foreign holdings and local equity sales play in ringgit weakness?

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Foreign Holdings and Local Equity Sales Contribute to Ringgit Weakness

Data indicates that a portion of the ringgit's depreciation can be attributed to selling activities by foreign holdings. This divestment from Malaysian assets was also influenced by concurrent selling within the local equities market.
Foreign Holdings Engage in Ringgit Selling

Analysis of market activity reveals that foreign investors have been selling the ringgit. This trend is a contributing factor to the local currency's downward movement.
Local Equity Sales Coincide with Ringgit Weakness

The selling pressure on the ringgit by foreign holdings was observed to be linked with sales in the domestic stock market. This suggests a correlation between foreign investor sentiment in Malaysian equities and their disposition towards the national currency.
Global Sentiment and Yuan Performance Impact Ringgit

Beyond specific foreign holdings activity, broader weak global sentiment and the performance of the Chinese yuan also play a role in the ringgit's weakness. The yuan's depreciation against the US dollar, influenced by factors such as corporate dollar buying and expectations of US monetary policy tightening, has a spillover effect on regional currencies like the ringgit. Economists note that Asian traders perceive the current rally in the US bond market as temporary, anticipating further increases in US yields, which can also put downward pressure on currencies like the ringgit.

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What role do foreign holdings and local equity sales play in ringgit weakness?

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