Political instability weighing down on ringgit - Fitch Solutions

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The ringgit is being weighed down by political instability, Fitch Solutions said in a Country Risk & Industry Research report.For example, it said the third wave of Covid-19 infections was partly due to unstable coalition politics hobbling the government's ability to swiftly respond to the pandemic in the fourth quarter of last year.The third wave of Covid-19, together with fiscal and monetary easing needed to support the economy through the pandemic, had "significantly" weakened the short-term outlook, according to the firm.As such, it has revised its 2021 average exchange rate forecast for the ringgit/US dollar exchange rate to RM4.15 from RM4.05.In the long term, Fitch Solutions said the local currency could trade slightly stronger due to a weakening bias in the US dollar, and rising oil prices.This is also because the ringgit had been undervalued in its r…