Ringgit to trade in tight range next week, OPR in focus

A money changer counts Malaysian ringgit banknotes for customers in Kuala Lumpur on June 11, 2015. The fall in the Malaysian ringgit would boost exports and encourage foreign tourists to visit the Southeast Asian country since goods and services will be cheaper. AFP PHOTO / MOHD RASFAN

KUALA LUMPUR, Sept 5 (Bernama): The ringgit is expected to trade in a tight range next week with all eyes on the overnight policy rate (OPR) review.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the statement from Bank Negara Malaysia (BNM) should be closely watched especially on how the central bank sees the economy post-automatic moratorium period, which will expire at month-end.

The Monetary Policy Committee (MPC) meeting is scheduled on Sept 10, 2020, with a number of analysts expecting a 25-basis point cut in the OPR.

"Recent data points have been quite mixed. We saw July export better than expected when it grew 3.1 per cent but August Purchasing Managers' Index (PMI) fell below 50-point demarcation line," he told Bernama.

Malaysia’s exports increased 3.1 per cent year-on-year in July, albeit at a slower rate than June’s 8.0 per cent.

In terms of value, it was the second highest at RM92.5 billion, after the record high in 2018, compared with June’s RM82.8 billion, signalling that the economy is gradually recovering from the second-quarter economic slump, said Kenanga Research.

In the second quarter, the economy contracted by 17.1 per cent from a marginal growth of 0.7 per cent registered in the first quarter.

The headline IHS Markit Malaysia PMI - a composite single-figure indicator of the manufacturing performance - dipped to 49.3 in August from 50.0 in July.

The IHS Markit said manufacturing production was stable in August, but lost some of the momentum seen during the initial rebound from the lockdown and the latest reading followed a joint-record expansion in June and further growth in July.

On a Friday-to-Friday basis, the ringgit strengthened against the US dollar at 4.1470/1520 from 4.1630/1680 in the previous week.

It hit 4.1400 level, the highest range in seven months, on Tuesday after a three-day weekend due to the National Day celebration on Monday.

The ringgit also traded higher against the Singapore dollar to 3.0410/0458 from 3.0581/0629 last Friday and rose versus the yen to 3.9393/9444 compared with 3.9561/9583.

The local unit climbed vis-a-vis the British pound to 5.5143/5213 from 5.5251/5322 and appreciated against the euro to 4.9150/9214 from 4.9486/9562 previously. - Bernama

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3

Did you find this article insightful?


100% readers found this article insightful

Next In Aseanplus News

Thousands pay tribute to Thai royals amid calls for reform
University of Hong Kong professor jailed for life over ‘cold-blooded’ murder of his wife, whose body he kept in a box in his office
Experts say 'fake meat' may not cook up a storm in China
Philippines police threaten social distancing violators with caning
Ringgit to continue upward momentum against US dollar next week
JD.com becomes first online platform to accept China's digital currency
Sony to shut Penang factory, consolidate facilities
Indonesia: 342 medical workers die of Covid-19; 6,027 cases reported and total now almost 570,000
22 victims in 2017 child porn cases receive compensation
13 new Covid-19 cases in Singapore, with 12 imported and 1 in the community

Stories You'll Enjoy