KUALA LUMPUR: The ringgit closed stronger yesterday, hitting a near one-year high against the greenback ahead of the US interest rate decision, says an economist.
At 6 pm, the local note stood at 4.1860/1900 against the US dollar, compared with last Friday’s close of 4.1975/2080. The ringgit last closed stronger, at 4.1760, on Oct 2, 2024.
The market was shut on Monday and Tuesday for the Malaysia Day holidays.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said expectations of a US Federal Reserve (Fed) interest rate cut had fuelled demand for emerging market currencies, including the ringgit.
“Clearly, traders and investors are watching for the Fed’s latest assessment, especially the dot plot chart, which will guide the market on the direction of US interest rates,” he told Bernama.
He said a 25-basis-point cut had largely been priced in by the market.
Mohd Afzanizam added that the key focus would be how far the Fed is prepared to lower rates and what that meant for the US economic outlook.
“In the immediate term, the dollar looks weak as the Fed may need to show the market that it is on top of the game,” he said.
The ringgit, however, traded lower against major currencies, weakening against the yen to 2.8607/8636 from 2.8373/8446 at last Friday’s close, against the British pound to 5.7131/7185 from 5.6864/7006, and against the euro to 4.9583/9631 from 4.9203/9326.
Against Asean currencies, the ringgit strengthened versus the Indonesian rupiah to 254.6/255.0 from 256.3/257.0 and against the Thai baht to 13.1892/2081 from 13.2317/2703. It, however, weakened against the Philippine peso to 7.36/7.37 from 7.35/7.37 and against the Singapore dollar to 3.2793/2827 from 3.2719/2803.
