KUALA LUMPUR: The ringgit opened higher against the US dollar on Thursday, as the market priced in expectations that Bank Negara Malaysia (BNM) would keep the overnight policy rate (OPR) unchanged at 2.75 per cent at its policy meeting later in the day, offsetting a firmer tone in the greenback.
At 8 am, the local currency strengthened to 4.0350/0570 against the US dollar, compared with Wednesday’s close of 4.0445/0495.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the US Dollar Index (DXY) rose 0.15 per cent to 98.781 after US President Donald Trump said he would not impose tariffs on Feb 1 following a deal with the North Atlantic Treaty Organisation (NATO) over Greenland.
However, he said policy unpredictability under the Trump administration would continue to unsettle global markets and fuel volatility, cautioning that the latest development should not be viewed as a firm assurance as conditions could still shift.
Against that backdrop, market attention is firmly on BNM’s Monetary Policy Committee decision later today.
"We believe the OPR will be kept unchanged as the Malaysian economy remains resilient. The key outcome from this meeting will be the committee’s latest assessment of global economic conditions and how these shape its monetary policy outlook,” he told Bernama.
Mohd Afzanizam added that the USD/MYR pair is likely to remain range-bound between 4.04 and 4.05 as the market stays cautious, albeit somewhat relieved by recent developments.
In early trade, the ringgit also advanced against a basket of major currencies.
It strengthened versus the Japanese yen to 2.5462/5603 from 2.5598/5631 on Wednesday, firmed against the British pound to 5.4142/4437 from 5.4237/4304, and gained against the euro to 4.7101/7357 from 4.7337/7395.
Against regional peers, the local currency traded broadly higher.
It rose against the Singapore dollar to 3.1389/1565 from 3.1502/1543, improved versus the Indonesian rupiah to 238.1/239.7 from 238.7/239.3, strengthened against the Thai baht to 12.8831/9612 from 13.0086/0301, and appreciated against the Philippine peso to 6.80/6.85 from 6.82/6.83. - Bernama
