KUALA LUMPUR, Jun 24 – Britons’ decision to leave the European Union (EU), the so-called Brexit, could prove beneficial for the ringgit as some expected the local currency to strengthen up to RM4 against the British pound. At 2pm, the ringgit was quoted at 5.6249/6503 against the pound sterling, firming from yesterday’s close of 5.9342/9465.
MIDF Research economist, Izzuddin Yussof, said the impact to the financial front would be minimal if the world’s fifth largest economy decided to remain in the EU as it would instead help improve sentiment and boost financial market. However, he said, with the United Kingdom exiting the economic bloc, the impact was expected to go beyond the financial markets and could also affect the global economy.
“The shock in the financial market will be huge, which could potentially slow down the whole global economy. To pinpoint a specific forecast will prove to be difficult as there are still a lot of uncertainties, though we are expecting the lowest (that the) Pound Sterling could depreciate against ringgit would be at RM4 per pound,” he told Bernama.
The results from the referendum showed that 51.89% of total voters chose to leave the EU while 48.11% decided to stay. The results sent the British pound to suffer its biggest single-day fall in history, plunging more than 10% against the dollar to hit levels last seen in 1985. The pound sterling is now trending at 1.37 per US dollar as at 3.50pm today as against 1.5 US dollar at yesterday’s close. — Bernama