Ringgit opens higher against US dollar following OPR hike

Ringgit opens higher against US dollar following OPR hike

KUALA LUMPUR,. The ringgit opened higher against the US dollar today, buoyed by the increase in the Overnight Policy Rate (OPR) to 3.00 per cent, but the ringgit-dollar pair is projected to trade in a narrow range as risk-off mode leads to increased demand for the greenback.

At 9am, the local note rose to 4.4350/4400 versus the US dollar from Wednesday’s closing rate of 4.4525/4580.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said there seemed to be risk-off mode taking hold in the markets at this time; nonetheless, the unexpected move by Bank Negara Malaysia’s (BNM) Monetary Policy Committee to increase the OPR had lifted the ringgit.

“However, as we expect BNM to stop the OPR revision cycle, spillover from the OPR hike seems limited. On that note, the ringgit should stay guarded as market participants are weighing the possibility of a pause by the US Federal Reserve (Fed) and the weakening global growth outlook,” he told Bernama.

He also explained that key US data points such as nonfarm payrolls would closely be monitored tonight as the Fed seemed to acknowledge the softening trend in the US labour market.

Meanwhile, the ringgit was traded lower against a basket of major currencies.

It depreciated against the Japanese yen to 3.3067/3110 from 3.2833/2876 on Wednesday, was easier vis-a-vis the British pound at 5.5814/5877 versus 5.5727/5796 previously, and fell against the euro to 4.8896/8951 from 4.9156/9216 at the last close.

The local note traded mixed against Asean currencies.

It improved further against the Philippine peso to 8.00/8.03 from 8.04/8.05 at Wednesday’s close, appreciated versus the Indonesian rupiah to 301.9/302.4 from 303.3/303.5 previously, was marginally lower against the Singapore dollar at 3.3426/3469 compared with 3.3420/3463, and fell vis-a-vis the Thai baht to 13.1298/1497 from 13.0817/1037.

The market was closed yesterday in conjunction with the Wesak Day holiday. — Bernama

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