Ringgit opens higher on expectations of OPR normalisation

The ringgit opened higher against the US dollar on Thursday, supported by the possibility of overnight policy rate (OPR) normalisation at Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) meeting next week.

At 8am, the ringgit rose to 4.0720/4.0800 against the US dollar from Wednesday’s close of 4.0745/4.0790.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the unchanged OPR at 2.75% could provide support for the local currency.

Meanwhile, he said the US dollar index (DXY) is currently down by 0.19% to 102.127 points as Federal Open Market Committee members left the benchmark interest rate unchanged at 3.75% to four per cent.

“It appears that the Federal Reserve is taking a guarded approach to reach its price stability goal at a time when the economy is deemed to be growing at a robust rate.

“On that note, we foresee the ringgit could be well supported,” he noted.

At the open, the ringgit was traded mostly lower against major currencies.

The ringgit gained vis-a-vis the Japanese yen to 2.5798/2.5851 from 2.5812/2.5843 at Wednesday’s close, but edged down against the British pound to 5.4268/5.4374 from 5.4130/5.4190 and fell against the euro to 4.5427/4.5516 from 4.5337/4.5387.

The ringgit performed mixed against its Asean peers.

It inched up against the Indonesian rupiah to 223.9/224.4 from 224.0/224.4, while flat against the Philippine peso at 6.36/6.37.

The local note fell against the Singapore dollar to 3.1785/3.1850 from 3.1775/3.1813 at Wednesday’s close, and was marginally lower against the Thai baht to 12.0759/12.1068 from 12.0726/12.0902.