KUALA LUMPUR, Oct 27 — The ringgit opened higher against the United States (US) dollar on Monday amid investors’ caution ahead of the US Federal Open Market Committee (US FOMC) meeting scheduled on October 28 and October 29.
At 8am, the ringgit appreciated to 4.2145/2350 against the US dollar from 4.2210/2255 at Friday’s close.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said September’s three per cent Consumer Price Index (CPI) print is below the 3.1 per cent consensus estimate.
This suggests that the US Federal Reserve (US Fed) is on track to deliver its second interest rate cut with possibly more cuts in 2026, as the US central bank has shifted its focus to reviving the job market.
"It means that the interest rate differential between the US Fed fund rate and overnight policy rate (OPR) will be narrowing in the near future," he told Bernama.
On the other hand, Bank Negara Malaysia (BNM) is in no hurry to cut the OPR. Therefore, Afzanizam believes the benchmark interest rate will remain steady for the remainder of 2025.
“From a policy rate perspective, it should be ringgit-positive. Therefore, we shall see the dollar-ringgit pair to linger around RM4.21 and RM4.22 today,” he said.
Afzanizam noted that US President Donald Trump’s presence at the 47th Asean Summit and Related Summits is positive for Malaysia, as it indicates that the US is supportive of global trade and open to active negotiations to arrive at a win-win solution.
Hence, this is a plus for the ringgit, albeit over the mid- to long-term.
At the opening, the ringgit traded mostly higher against major currencies.
It inched up against the Japanese yen to 2.7553/7689 from 2.7592/7623 at Friday's close, advanced against the British pound to 5.6150/6423 from 5.6232/6292, but was down versus the euro to 4.9023/9262 from 4.9010/9062.
The local note was traded mostly higher against Asean currencies.
It appreciated against the Singapore dollar to 3.2472/2632 from 3.2484/2521 at Friday's close, strengthened versus the Philippine peso to 7.18/7.22 from 7.20/7.21, and edged up vis-à-vis the Indonesian rupiah to 253.8/255.2 from 254.2/254.6 previously.
The local note weakened versus the Thai baht to 12.8939/9630 from 12.8768/8952 at Friday's close.
