KUALA LUMPUR, March 27 — The ringgit opened higher for the fourth consecutive day as the Malaysian government adopts a pragmatic approach to fuel subsidies, balancing fiscal discipline with cost-of-living concerns amid tensions in West Asia.
At 8 am, the local currency strengthened to 3.9855/4.0050 against the US dollar from yesterday’s close of 3.9920/9955.
In a special address yesterday, Prime Minister Datuk Seri Anwar Ibrahim announced that, effective April 1, the individual monthly purchase limit for BUDI95 will be temporarily reduced to 200 litres from 300 litres previously, due to the ongoing conflict in West Asia.
Most people are not expected to be affected by the quota reduction, as consumers use about 100 litres per month on average, with nearly 90 per cent consuming less than 200 litres monthly.
Anwar also noted that Iran has allowed Malaysian oil tankers to pass through the Strait of Hormuz.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the move reflects the government’s effort to strike a balance between maintaining fiscal discipline and minimising the impact on households, even as geopolitical uncertainties continue to weigh on global markets.
“This should be positive for the ringgit, as the government is cognisant of the ripple effects from the war in Iran and has provided a timely response,” he told Bernama.
Meanwhile, SPI Asset Management managing partner Stephen Innes said US President Donald Trump’s 10-day extension on potential strikes against Iranian energy infrastructure — effectively a temporary ceasefire window — has eased the US dollar’s safe-haven rally.
“The extension has acted more as a pressure release than a true reversal. That said, market traders are likely to adopt a defensive posture, leaning towards the US dollar heading into the weekend, given the ongoing risk of escalation once that window closes,” he said.
The ringgit also opened stronger against a basket of major currencies.
It rose against the Japanese yen to 2.4951/5077 from 2.5025/5049 at yesterday’s close, strengthened against the British pound to 5.3143/3403 from 5.3301/3348 yesterday, and climbed against the euro to 4.5969/6194 from 4.6140/6180 previously.
The local currency also traded higher against ASEAN currencies.
It appreciated against the Singapore dollar to 3.0994/1148 from 3.1102/1132 yesterday, gained against the Thai baht to 12.0868/1566 from 12.1529/1695, edged up against the Indonesian rupiah to 235.7/237.0 from 236.1/236.4, and inched higher against the Philippine peso to 6.61/6.65 from 6.62/6.63 previously.
