KUALA LUMPUR: The ringgit opened firmer against the US dollar on Monday, hovering near its strongest level in more than seven years following a boost in risk appetite amid Bank Negara Malaysia's decision to maintain the overnight policy rate and a weaker US dollar index.
At 8am, the ringgit strengthened to 3.9850/9950 against the dollar from 4.0045/0080 recorded last Friday.
The ringgit last traded at a similar level on May 24, 2018, when it touched RM3.9797 against the greenback.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the local currency was supported by a sanguine outlook on Malaysia's economy, particularly following Bank Negara Malaysia's recent Monetary Policy Committee meeting.
"BNM may be inclined to keep the OPR steady, and we see upside potential as the long-term average from July 21, 2005, until today is about RM3.82," he said.
On a global basis, Mohd Afzanizam, the main focus is on the Dollar-Yen (USDJPY), as the Bank of Japan (BOJ) and the Federal Reserve Bank of New York are seen to be making direct interventions in the foreign exchange market.
"This happened as Japan is going for a snap election on Feb 8, and election pledges are mostly populist in nature, which can cause further strain on Japan's fiscal position.
"It seems that the intervention could see the US Dollar be much weaker," he added.
Mohd Afzanizam pointed out that the US Dollar Index (DXY) fell 0.43 per cent to 97.181 points presently.
He added that the USDMYR exchange could make another attempt to close below the RM4.0000 level today.
The ringgit briefly traded around RM3.99 during midday on Friday but closed at RM4.0062.
The ringgit slipped versus the Japanese yen to 2.5680/5748 from 2.5337/5361 at Friday's close, weakened versus the British pound to 5.4447/4584 from 5.4177/4224, and declined vis-à-vis the euro to 4.7258/7377 from 4.6993/7034.
It also traded easier against the Singapore dollar to 3.1348/1429 from 3.1302/1330 on Friday, slipped versus the Thai baht to 12.8420/8858 from 12.8362/8544, but inched up vis-à-vis the Indonesian rupiah to 236.9/237.6 compared with 238.0/238.3 and went up against the Philippine peso to 6.74/6.76 from 6.77/6.78 previously. - Bernama
