Political turmoil in France affects ringgit, says Rafizi

PETALING JAYA: The recent political turmoil in France has indirectly affected the ringgit, says economy minister Rafizi Ramli.

He said the French government’s decision to dissolve Parliament last week caused global markets to worry about a possible victory for the far right in France.

“This fear led to a sell-off of the Euro and French stocks, with investors moving their money to the US dollar,” said Rafizi, who is PKR deputy president, at a Pakatan Harapan rally for the Sungai Bakap by-election.

Rafizi said although the situation in France is unrelated to Malaysia, the strengthened US dollar has affected the ringgit.

“Despite being the best-performing currency in the region, the ringgit remains around RM4.70 to the US dollar due to the dollar’s strength,” he added.

In France’s parliamentary elections, the far right National Rally party made major gains after the first round of voting last Sunday. A second “run-off” election will be held on Sunday as no one won a majority after the first round.

Investors have been rattled by the prospect of the far right winning a parliamentary majority and the European Central Bank has put financial markets on notice for fear of a sell-off of French government debt that could spread to the Eurozone.