KUALA LUMPUR: The ringgit appreciated against the US dollar at the close today, supported by positive sentiment as the US Federal Reserve (Fed) seemed unlikely to cut interest rates in the near term, said an analyst.
At 6 pm, the ringgit appreciated to 4.7140/7170 against the greenback from Wednesday’s close of 4.7335/7400.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the Fed maintaining its view of three rate cuts this year has helped to improve market sentiment.
He said regional currencies including the ringgit have gained against the greenback.
"The Federal Open Market Committee’s decision yesterday was a clear indication that the rate cut thesis remains intact.
"Now it is just a matter of timing and the quantum for the rate reduction,” he told Bernama.
He noted that Bank Negara Malaysia (BNM) has also continued to reiterate that the ringgit is undervalued, paving the way for possible appreciation later in the year.
"As BNM is likely to keep the Overnight Policy Rate unchanged for the rest of 2024, the interest rate differentials with the US rate is expected to be reduced when the Fed starts to cut rate as early as June,” he added.
At the close, the ringgit was traded mostly lower against a basket of major currencies.
It increased vis-a-vis the Japanese yen to 3.1200/1222 from 3.1207/1252 on Wednesday, but fell versus the euro to 5.1444/1477 from 5.1306/1377 yesterday and slid against the British pound to 6.0202/0241 from 6.0082/0165.
The ringgit, however, traded mostly higher against other Asean currencies.
It was firmer versus the Thai baht at 13.0712/0850 compared with 13.0821/1048 at Wednesday’s close, appreciated vis-a-vis the Philippine peso to 8.41/8.42 from 8.43/8.45 yesterday and rose against the Indonesian rupiah to 300.8/301.1 from 301.2/301.6 previously.
The local note slipped against the Singapore dollar to 3.5205/5230 from 3.5204/5255. - Bernama
