Ringgit opens higher vs US dollar on fiscal discipline pledge

The ringgit opened higher against the US dollar on Monday, supported by the government’s commitment to fiscal discipline following the tabling of Budget 2027 last Friday.

At 8am, the ringgit edged up to 4.0820/4.0880 against the greenback from Friday’s close of 4.0830/4.0875.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the government’s commitment to fiscal discipline was reflected in its target to narrow the fiscal deficit to 3.3% of gross domestic product in 2027, from an estimated 3.6% this year.

He said the pragmatic approach should help preserve Malaysia’s sovereign credit rating, providing firm support for the ringgit.

However, he said external conditions remained uncertain, particularly developments in the Middle East and their potential impact on global crude oil prices.

“Hence, attention will be on whether the US Federal Reserve will consider raising interest rates further this month.

“Therefore, we expect the ringgit-US dollar pair to maintain its tight-range bias today,” he told Bernama.

At the opening, the ringgit traded mostly higher against a basket of major and Asean currencies.

The local note strengthened against the British pound to 5.4038/5.4117 from 5.4063/5.4123 at Friday’s close and rose against the euro to 4.5735/4.5802 from 4.5807/4.5858 previously. However, it weakened against the Japanese yen to 2.5806/2.5846 from 2.5791/2.5821 on Friday.

Against Asean currencies, the ringgit edged up against the Singapore dollar to 3.1876/3.1928 from 3.1896/3.1934 at Friday’s close and the Thai baht to 12.1720/12.1957 from 12.1735/12.1909 previously.

The local note also ticked up against the Indonesian rupiah to 228.0/228.4 from 228.1/228.4 at Friday’s close, while remaining unchanged against the Philippine peso at 6.50/6.51.