KUALA LUMPUR, June 23 — The ringgit opened higher against the US dollar on Tuesday as peace negotiations in West Asia showed signs of progress, an analyst said.
At 8 am, the local currency strengthened to 4.1440/1505 against the greenback from 4.1465/1500 at yesterday's close.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US government's decision to allow Iran to sell its oil on the international market signalled that ongoing peace negotiations were progressing positively.
“As a result, WTI and Brent crude prices are hovering around US$74.29 and US$77.90 per barrel, respectively.
“Traders seem to be grappling with prospects of lower oil prices and lower inflation, but remain uncertain about the potential interest rate hike by the US Federal Reserve (Fed),” he told Bernama today.
On the domestic front, Mohd Afzanizam said the Ministry of Finance's latest move to rationalise diesel subsidies could be viewed as credit-positive.
He said the new mechanism, which will leverage MyKad to distribute diesel subsidies, could generate savings of up to RM2 billion.
“It shows that the government is proactively responding to current challenges while remaining mindful of the impact on the rakyat.
“I suppose the ringgit should remain fairly stable today,” he added.
At the opening, the ringgit traded mixed against a basket of major and regional currencies.
It strengthened against the euro to 4.7345/7419 from 4.7506/7547 at Monday's close, but weakened against the British pound to 5.4887/4973 from 5.4850/4896. It was little changed against the Japanese yen at 2.5648/5690 compared with 2.5635/5658 previously.
Against ASEAN currencies, the ringgit appreciated against the Singapore dollar to 3.2030/2085 from 3.2069/2098 at yesterday's close and rose against the Thai baht to 12.5637/5899 from 12.5919/6075.
The local note was nearly unchanged against the Indonesian rupiah at 232.2/232.7 from 232.3/232.6 and remained unchanged against the Philippine peso at 6.78/6.79.
