Meanwhile, Bank Negara Malaysia (BNM) has maintained the overnight policy rate (OPR) at 3% today.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the monetary policy committee (MPC) has decided to keep the OPR unchanged, citing that the global economy continues to grow along with domestic demand, although the downside risk to growth has escalated.
“On that note, BNM has announced a 100 basis points cut in the statutory reserve requirement.
“Such a move will add RM19 billion worth of liquidity into the system that will translate into more lending and financing activities among banks,“ Afzanizam told Bernama.
He said it appears that if there were more trade deals with the US, it would lift the value of the US dollar, as confidence in the greenback may have returned.
Afzanizam said the US Dollar Index (DXY) continues to rise to 100.074 points as talks of possible trade deals with the US have gained momentum.
Consequently, the ringgit depreciated by 0.82% to RM4.27.
Meanwhile, SPI Asset Management managing partner Stephen Innes said a hawkish stance from the federal open market committee (FOMC) has also pushed the ringgit down today.
“With Wall Street futures gaining and trade-related macro uncertainty easing, the dollar’s previous headwinds are lifting.
“As a result, the greenback is showing renewed strength across the board,” he said.
At 6pm, the local note inched lower to 4.2780/4.2830 versus the greenback compared to yesterday’s close of 4.2360/4.2435.
At the close, the ringgit traded mostly lower against a basket of major currencies.
It gained versus the Japanese yen to 2.9534/2.9571 from 2.9556/2.9613 at yesterday’s close, but eased vis-a-vis the euro to 4.8264/4.8321 from 4.8104/4.8189, and dropped against the British pound to 5.6769/5.6835 from 5.6479/5.6579 previously.
Meanwhile, the ringgit was lower against its Asean peers.
It fell versus the Singapore dollar to 3.2984/3.3025 from 3.2802/3.2862, depreciated against the Thai baht to 13.0189/13.0404 from 12.9383/12.9691 yesterday, and edged lower vis-a-vis the Indonesian rupiah to 259.2/259.6 from 256.1/256.7 previously.
The local note also inched lower against the Philippine peso to 7.69/7.70 from 7.64/7.66.