KUALA LUMPUR, Nov 5 — The ringgit extended its gains against the United States dollar and other major currencies today, closing firmer after Bank Negara Malaysia’s (BNM) decision to maintain the Overnight Policy Rate (OPR) at 2.75 per cent.
At 6pm, the local note rose to 4.0445/0490 versus the greenback from yesterday’s close of 4.0610/0660.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the decision to keep the OPR at 2.75 per cent is in line with estimates, with BNM seen to have a positive outlook on the economy and 2026 gross domestic product (GDP) growth expected to settle above 5 per cent.
“The balance of risks are seen to be stable although concerns on higher inflation going forward warrant a cautious stance.
“The case for a 25-basis point hike in the OPR during 2027 should not be ruled out and perhaps it could happen in the first quarter of 2027… (which) could provide further support to the ringgit,” he told Bernama.
Afzanizam noted that the US midterm elections were a key driver of market sentiment today as a Democrat-controlled Congress could mean more scrutiny on the Trump administration’s policies.
“Brent crude oil fell below US$100 per barrel to US$95.12 currently, while the US Dollar Index (DXY) fell by 0.14 per cent to 101.423 points,” he said.
Meanwhile, SPI Asset Management managing partner Stephen Innes said market sentiment was supported by a decline in US Treasury yields following the sharp overnight drop in crude oil prices, as the geopolitical risk premium was effectively stripped from the oil market.
He said traders are increasingly convinced that a return to conflict with Iran was unlikely, easing inflationary concerns in the US bond market.
“The currency is taking its cues from external developments rather than domestic monetary policy. That said, the US dollar has not weakened significantly, and I expect that’s because the US Federal Reserve (Fed) is still expected to raise rates in December.
“Until those expectations begin to unwind, there’s probably a limit to how far the ringgit can appreciate. For now, the direction of crude oil prices and the Fed’s reaction function as the two big moving parts for Asian currencies, including the ringgit,” he added.
The ringgit traded higher against a basket of major currencies.
It strengthened versus the Japanese yen to 2.5548/5578 from 2.5636/5669 at yesterday’s close, appreciated against the euro to 4.5428/5478 from 4.5723/5779 yesterday, and edged up vis-a-vis the British pound to 5.4455/4516 from 5.4783/4850 previously.
However, the ringgit performed mostly lower against its ASEAN peers.
The local currency gained versus the Singapore dollar to 3.1679/1717 from the previous close of 3.1771/1813, but it slipped against the Thai baht to 12.1013/1199 from 12.0673/0868 yesterday, inched down versus the rupiah to 223.6/224.0 from 223.5/223.8, and fell vis-a-vis the Philippine peso to 6.42/6.43 from 6.39/6.40.
