Ringgit opens higher ahead of expected OPR hike

The ringgit opened higher against the US dollar and major currencies on Thursday ahead of Bank Negara Malaysia’s (BNM) Overnight Policy Rate (OPR) decision, with expectations of an interest rate hike lending support to the local currency.

BNM’s Monetary Policy Committee (MPC) is scheduled to hold its sixth and final policy meeting of 2026 today.

At 8am, the ringgit strengthened to 4.0585/4.0660 against the US dollar from Wednesday’s close of 4.0610/4.0660.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said BNM is expected to raise the OPR by 25 basis points at its final MPC meeting of the year.

“We are anticipating a 25-basis-point increase could be delivered as a means to normalise its monetary policy stance after economic growth continues to exceed target this year,” he added.

On the external front, Afzanizam said improved risk appetite following the United States (US) midterm elections had also contributed to the ringgit’s positive performance.

He said the improved sentiment was reflected in global financial markets, with Brent crude oil prices falling 8.62% to US$94.67 per barrel and the yield on the 10-year US Treasury note declining eight basis points to 4.89%.

Meanwhile, the S&P 500 rose 1.58% to close at 7,688.62 points, while the US Dollar Index (DXY) fell 0.33% to 101.528 points.

Against this backdrop, Afzanizam expects the ringgit to extend its gains, with the ringgit-US dollar pair potentially testing the RM4.05 level.

Against major currencies, the ringgit edged up against the Japanese yen to 2.5628/2.5677 from 2.5636/2.5669 at Wednesday’s close. It also strengthened against the euro to 4.5601/4.5686 from 4.5723/4.5779 and the British pound to 5.4696/5.4797 from 5.4783/5.4850.

However, the ringgit traded mixed against its Asean peers.

It strengthened against the Singapore dollar to 3.1734/3.1798 from 3.1771/3.1813 at Wednesday’s close and inched up against the Indonesian rupiah to 223.4/223.8 from 223.5/223.8.

Conversely, the local note eased against the Thai baht to 12.0746/12.1037 from 12.0673/12.0868, while it was unchanged against the Philippine peso at 6.39/6.40.

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