Ringgit likely to see range-bound trading next week

A moneychanger worker showing the ringgit and US dollar notes in Kuala Lumpur. - MUHAMAD SHAHRIL ROSLI/The Star.

KUALA LUMPUR, July 4 (Bernama): The ringgit is expected to trade in range-bound mode against the US dollar next week as investors await the upcoming overnight policy rate (OPR) decision by the central bank.

An analyst said the announcement would be key in determining the economic position in the next several months as the banking moratorium would end in September.

"With the local job market still struggling to face the music from Covid-19 and recession still on the horizon, another rate cut is expected to be on the cards to boost the financial liquidity as well as complement the stimulus package," she told Bernama .

Malaysia's OPR now stands at 2.00 per cent, the lowest since the 2008-2009 Global Economic Crisis, and according to research notes, Bank Negara Malaysia is expected to reduce another 25 basis points to 1.75 per cent to safeguard the economy after the fallout due to Covid-19 pandemic.

On foreign investments, she said the local note which is now trading on a muted mode due to global market uncertainty would remain so as investors are holding back to reposition their holdings.

"The global oil market has remained stagnant at US$40 per barrel as demand is still slow after economies started to re-open. However, as long as logistics and air travel remain on restriction, demand will continue to be subdued," she said.

On a weekly performance, the ringgit ended Friday slightly higher against the greenback to 4.2840/2900 from 4.2890/2930 recorded a week earlier.

The local currency also increased against the Singapore dollar to 3.0718/0766 from 3.0827/0865 and rose versus the Japanese yen to 3.9855/9918 from 4.0114/0155.

The ringgit meanwhile fell against the British pound to 5.3332/3423 from 5.3124/3190 on the previous Friday but inched up vis-a-vis the euro to 4.8101/8185 from 4.8118/8167 previously. - Bernama

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Ringgit , US dollar , OPR , Range-bound , Monetary Policy


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