KUALA LUMPUR, July 31 — The ringgit opened higher against the United States dollar and a basket of major currencies today, ahead of the 13th Malaysia Plan (13MP) announcement this afternoon, said Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid.
At 8am, the local note strengthened to 4.2370/2570 against the greenback from yesterday’s close of 4.2410/2455.
Prime Minister Anwar Ibrahim will table the 13MP in Parliament later today.
Afzanizam said the national plan has raised expectations of higher development spending, which could support stronger economic growth.
“The 13MP allocation is likely to spur domestic demand, particularly in construction-related sectors,” he told Bernama.
Meanwhile, Afzanizam noted that the US Dollar Index continued to climb, reaching 99.82 points, after the Federal Open Market Committee of the US Federal Reserve (Fed) opted to keep the Fed Funds Rate unchanged at between 4.25 and 4.5 per cent.
He said the Fed has revised down its economic outlook, citing a moderation in activity in the first half of the year.
“This aligns with the second-quarter GDP print of 3 per cent, largely driven by a sharp 30 per cent drop in imports, which led to a significant net export contribution to overall growth.
“The decision to maintain the policy rate was not unanimous, as two Fed members voted in favour of a quarter-point cut,” he added.
For now, Afzanizam said development remains positive for the greenback, as wide interest rate differentials continue to favour the US dollar.
As such, the ringgit is expected to trade within the RM4.24 to RM4.25 range today.
At the opening, the ringgit traded higher against major currencies.
It appreciated against the Japanese yen to 2.8394/8530 from 2.8646/8678 at yesterday’s close, rose against the British pound to 5.6161/6427 from 5.6745/6805, and strengthened versus the euro to 4.8420/8649 from 4.8996/9048.
The local unit was also higher against most regional currencies, although flat against the Philippine peso at 7.36/7.40 from 7.36/7.38 previously.
It edged up against the Indonesian rupiah to 258.2/259.6 from 258.5/258.9, gained on the Singapore dollar to 3.2695/2852 from 3.2919/2957, and improved against the Thai baht to 12.9433/13.0136 from 13.0528/0719.
— Bernama
