Despite cautious mood, ringgit rises against the US dollar

Despite cautious mood, ringgit rises against the US dollar

Investors staying on the sidelines while waiting for word from Bank Negara on a possible hike in the OPR.

Troubles in China and the Fed’s hawkish stance are likely to keep investors away from most currencies, including the ringgit, in favour of the greenback.
KUALA LUMPUR:
While a cautious mood prevailed as investors awaited the word from Bank Negara Malaysia (BNM) on interest rates, the ringgit rebounded from yesterday’s loss to start the day on a positive note.

The central bank’s two-day monetary policy committee (MPC) meeting begins tomorrow and a decision on whether or not to raise the overnight policy rate (OPR) is expected.

There has been speculation that BNM could raise the OPR by another 25 basis points (bps) to bring the OPR to 2.5%. At its last meeting in July, the MPC raised the rate by 25bps to 2.25%.

At 9.01am today, the local currency advanced to 4.4860/4.4895 against the greenback from yesterday’s close of 4.4900/4.4940.

An analyst said the market expected the MPC to continue raising the OPR by another 25bps at this week’s meeting.

“And as long as the US Federal Reserve stays the course for outsized rate hikes in the coming months and China’s (economic) worries persist, we think most Asian currencies, including the ringgit, will be on the defensive against the US dollar,” he said.

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

The local unit depreciated against the Singapore dollar to 3.2022/3.2052 from yesterday’s close of 3.1978/3.2011 and fell against the euro to 4.4712/4.4747 from 4.4590/4.4630.

It eased against the Japanese yen to 3.1970/3.1997 from 3.1966/3.1997 and weakened against the British pound to 5.1984/5.2024 from 5.1689/5.1735.

Stay current - Follow FMT on WhatsApp, Google news and Telegram

Subscribe to our newsletter and get news delivered to your mailbox.