Ringgit opens steady vs dollar ahead of rate decisions

KUALA LUMPUR: The ringgit opened almost flat against the US dollar this morning as investors awaited lending rate decisions both domestically and in the United States.

Bank Negara Malaysia’s Monetary Policy Committee (MPC) is scheduled to announce its Overnight Policy Rate (OPR) decision tomorrow, while in the US, markets are looking ahead to the Federal Reserve (Fed)’s decision on the Federal Funds Rate (FFR) next month.

The narrowing gap between the two benchmark rates remains the main factor influencing the local note’s performance.

At 8am, the ringgit stood at 4.1945/4.4.2050 against the US dollar, compared with Tuesday’s close of 4.1950/4.4.1985.

Bank Muamalat Malaysia Bhd chief economist, Afzanizam Rashid, said the market expects the MPC to maintain the OPR, while the United States continues with rate cuts, which would further narrow the gap between lending rates.

“That, coupled with ongoing fiscal reforms in Malaysia, is credit-positive for the country. More foreign funds would likely be attracted to Malaysian Government Securities and Government Investment Issues,” he noted.

“So far, the bid-to-cover ratio for government bonds has been healthy at 2.6 times for the first 10 months of this year, compared with the 2022–2024 average of 2.2 times,” he added.

As for the greenback, the US Dollar Index (DXY) continued to climb towards the 100-point mark as the Washington shutdown entered its 35th day.

“It appears that the Fed should continue cutting interest rates, but mixed views among its members have challenged that outlook. This has lent support to the US dollar in the immediate term,” Afzanizam said.

He added that the US dollar–ringgit pair (USD/MYR) is expected to trade within a narrow range of RM4.19 to RM4.20 today.

At the opening, the ringgit mostly traded higher against major currencies.

It rose against the British pound to 5.4612/5.4749 from 5.4795/5.4841 at Tuesday’s close, and strengthened versus the euro to 4.8174/4.8294 from 4.8238/4.8279. However, it slipped against the Japanese yen to 2.7322/2.7392 from 2.7331/2.7355 previously.

The local note also traded mostly higher against Asean currencies.

It advanced against the Singapore dollar to 3.2075/3.2158 from 3.2131/3.2160 at Tuesday’s close and firmed vis-a-vis the Thai baht to 12.8701/12.9118 from 12.8859/12.9026.

The ringgit was almost unchanged against the Indonesian rupiah at 251.0/251.8 versus 251.0/251.4 yesterday, and steady against the Philippine peso at 7.16/7.19 from 7.16/7.18 previously.