adminKUALA LUMPUR: The ringgit opened higher against the US dollar and other major currencies on Thursday ahead of the announcement of the Overnight Policy Rate (OPR) decision by Bank Negara Malaysia (BNM), with expectations of an interest rate hike providing support to the local currency.
BNM’s Monetary Policy Committee (MPC) is scheduled to hold its sixth and final policy meeting for 2026 today.
At 8am, the ringgit strengthened to 4.0585/0660 against the US dollar from 4.0610/0660 at the close on Wednesday.
Bank Muamalat Malaysia Bhd Chief Economist, Mohd Afzanizam Abdul Rashid said BNM is expected to raise the OPR by 25 basis points at the last MPC meeting for the year.
“We expect a 25 basis point increase to be implemented as a step to normalise the monetary policy stance after economic growth continued to exceed the target this year,” he told Bernama.
Regarding external developments, Mohd Afzanizam said that increased risk appetite following the United States (US) mid-term elections also contributed to the positive performance of the ringgit.
He said the improved sentiment was also reflected in the global financial markets, with Brent crude oil prices declining 8.62 percent to US$94.67 per barrel while the yield on the 10-year US Treasury note fell eight basis points to 4.89 percent.
Meanwhile, the S&P 500 index rose 1.58 percent to 7,688.62 points at the close while the US Dollar Index (DXY) fell 0.33 percent to 101.528 points.
Based on this development, Mohd Afzanizam expects the ringgit to continue its strengthening, with the ringgit-US dollar pair potentially testing the RM4.05 level.
Against other major currencies, the ringgit also rose against the Japanese yen to 2.5628/5677 from 2.5636/5669 at Wednesday’s close and strengthened against the euro to 4.5601/5686 from 4.5723/5779 and the British pound to 5.4696/4797 from 5.4783/4850.
However, the ringgit traded mixed against ASEAN currencies.
The ringgit strengthened against the Singapore dollar to 3.1734/1798 from 3.1771/1813 at Wednesday’s close and rose against the Indonesian rupiah to 223.4/223.8 from 223.5/223.8.
The local unit depreciated against the Thai baht to 12.0746/1037 from 12.0673/0868 and was unchanged against the Philippine peso at 6.39/6.40.
— BERNAMA
