Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the market had anticipated a larger reduction to the one-year loan prime rate (LPR), which was cut by 10 basis points to 3.4% today.

“The cut was smaller than the 15 basis points reduction expected by the market. Investors were also disappointed by the five-year LPR, which was surprisingly maintained at 4.2%,” he said.

“Consequently, China’s renminbi (yuan), weakened against the US dollar by 0.29% to 7.3059 yuan,” he told Bernama, adding that China appears to be quite timid in its attempt to revive its slowing economy.

“Therefore, it’s going to be a (predominantly) risk-off mode at the moment, which would translate into a weaker ringgit,” he said.

At 6pm, the local currency remained unchanged at 4.6465/4.6510 against the greenback from last Friday’s close.

The ringgit was traded mostly lower against a basket of major currencies.

It strengthened versus the Japanese yen to 3.1869/3.1902 from 3.1926/3.1959 last Friday, depreciated against the euro to 5.0647/5.0696 from 5.0503/5.0552 and inched down vis-a-vis the British pound to 5.9196/5.9254 from 5.9131/5.9189 previously.

The local currency was mixed against other Asean currencies.

The ringgit rose slightly against the Philippine peso to 8.24/8.26 from 8.27/8.28 last Friday and improved versus the Indonesian rupiah to 303.1/303.6 from 303.9/304.2 previously.

It declined against the Singapore dollar to 3.4241/3.4279 from 3.4228/3.4264 last Friday and slid vis-a-vis the Thai baht to 13.2070/13.2258 from 13.1331/13.1510.