KUALA LUMPUR, May 7 — The ringgit extended yesterday’s momentum to open higher today amid expectations of further appreciation.
Market consensus suggests Bank Negara Malaysia (BNM) is likely to maintain the Overnight Policy Rate (OPR) at 2.75 per cent.
At 8 am, the local currency traded at 3.9050/9300 against the US dollar compared with 3.9230/9275 at yesterday’s close.
BNM will hold its third Monetary Policy Committee meeting today, with market players anticipating the OPR to remain unchanged at 2.75 per cent while awaiting the latest assessment of Malaysia’s inflation and growth prospects.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid told Bernama that the ringgit’s performance was also supported by improved risk appetite after the United States and Iran were reportedly set to reach a deal and reopen the Strait of Hormuz.
“Risk appetite improved substantially. The S&P 500 and Nasdaq jumped 1.46 per cent and 2.02 per cent in a single day respectively, to close at 7,365.12 points and 25,838.94 points.
“The two-year and 10-year US Treasury yields fell eight basis points each to 3.87 per cent and 4.35 per cent respectively.
“The US Dollar Index (DXY) fell 0.43 per cent to 98.023 points.
“As such, the ringgit could stage further appreciation today with BNM likely to keep the OPR steady at 2.75 per cent. Perhaps today, the US dollar-ringgit pair may move towards RM3.90,” he said.
At the opening, the ringgit traded higher against a basket of major currencies.
It strengthened against the euro to 4.6058/6170 from 4.6189/6242 at Wednesday’s close, rose against the British pound to 5.3280/3409 from 5.3443/3504 previously, and strengthened versus the Japanese yen to 2.5046/5109 from 2.5159/5191 yesterday.
The local currency was mostly higher against regional peers.
It appreciated against the Singapore dollar to 3.0909/0986 from 3.0946/0986 at yesterday’s close and strengthened against the Thai baht to 12.1536/1898 from 12.1866/2074.
The local note traded almost flat against the Indonesian rupiah at 225.4/226.1 from 225.6/225.9 previously and was unchanged against the Philippine peso at 6.39/6.41.
