An analyst said traders also turned cautious as they await the outcome of Bank Negara Malaysia’s (BNM) two-day monetary policy committee (MPC) meeting. The meeting starts tomorrow.

The ringgit opened at 4.3305/4.3350 against the greenback today, down from yesterday’s close of 4.3150/4.3200.

However, this is not a sign of any weakness in the Malaysian economy. ActiveTrades trader Dyogenes Rodrigues Diniz pointed out that the economy had consistently shown good numbers, a factor that has attracted the attention of investors looking for opportunities in Southeast Asia.

“The unemployment rate in Malaysia has been decreasing in recent months (3.6%) and so has inflation (4%),” he told Bernama.

Driven by the restrictive monetary policy adopted by the US Federal Reserve in recent months, the ringgit has weakened to its worst level against the greenback since 1998, at 4.7475.

“Due to the cyclical nature of the market, the recent bullish move allowed a strong retracement which could bring the ringgit to the 4.000 region over the next few months,” he said.

Back home, the market expects the central bank’s MPC to continue raising the overnight policy rate by another 25 basis points to 3% at this week’s meeting.

Meanwhile, the ringgit traded lower against a basket of major currencies.

The local unit fell to 5.2685/5.2734 against the British pound from 5.2643/5.2704 at yesterday’s close, slipped against the Singapore dollar to 3.2701/3.2736 from 3.2677/3.2720.

It was lower versus the euro to 4.6767/4.6811 from 4.6693/4.6747 and weakened vis-a-vis the Japanese yen to 3.3638/3.3672 from 3.3616/3.3658 at yesterday’s close.