Ringgit rises against US dollar for second straight day after interest rate hike

KUALA LUMPUR: The ringgit ended higher for the second straight session today against the US dollar on continued buying interest after an unexpected interest rate hike by the central bank and on anticipation of a better first quarter gross domestic product (GDP) result, said an analyst.

At 6 pm, the local currency advanced to 4.3755/3785 against the greenback from Tuesday's close of 4.3800/3850.

The analyst said the anticipation of stronger-than-expected GDP data in the first quarter of 2022, to be released on Friday, as well as the unexpected overnight policy rate (OPR) hike by 25 basis points, lifted market sentiments.

"Besides, firmer crude oil prices, which saw the benchmark Brent crude oil continuing to hover above US$100 per barrel, continued to support the ringgit," he said.

Bank Negara Malaysia (BNM) today announced that the OPR will be increased by 25 basis points to 2.00 per cent after its third monetary policy committee (MPC) meeting this year.

The central bank said the sustained reopening of the global economy and the improvement in labour market conditions have continued to support the recovery of economic activity.

However, the ringgit was traded lower against a basket of major currencies.

It depreciated against the Singapore dollar to 3.1583/1607 from Tuesday's close of 3.1499/1540 and decreased vis-a-vis the Japanese yen to 3.3723/3748 from 3.3643/3684.

The local note weakened versus the euro to 4.6218/6250 from 4.6156/6209 yesterday and fell against the British pound to 5.4147/4184 from 5.3909/3971 previously. - Bernama