Ringgit opens higher on expectations of OPR normalisation

The ringgit opened higher against the US dollar and major currencies on Monday, supported by expectations of a possible overnight policy rate (OPR) normalisation ahead of Bank Negara Malaysia’s Monetary Policy Committee (MPC) meeting this Thursday.

At 8am, the local note was slightly higher at 4.0550/4.0635 against the greenback from last Friday’s close of 4.0555/4.0600.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid opined that the MPC members would decide to raise the OPR by 25 basis points (bps).

He said the pre-emptive rate cut in July 2025, which lowered the OPR from three per cent to 2.75%, had served its purpose, as concerns over slower economic growth following the tariff shock had not materialised.

“In 2025, the gross domestic product (GDP) grew by 5.2% while in the first nine months of 2026, GDP growth accelerated to 5.5%.

“On that note, the case for OPR normalisation is clear as the fears of slower growth following the tariff shock have not materialised. As such, this could provide support for the ringgit today,” he added.

However, he said market consensus was that the benchmark interest rate would remain unchanged at 2.75%.

On external developments, he said currency markets were expected to remain cautious ahead of the United States midterm elections on Tuesday, particularly amid uncertainties surrounding the conflict in the Middle East.

Against major currencies, the ringgit rose against the British pound to 5.4276/5.4390 from 5.4461/5.4522 at last Friday’s close, gained against the euro to 4.5238/4.5332 from 4.5413/4.5464, and strengthened vis-a-vis the Japanese yen to 2.5715/2.5771 from 2.5782/2.5812 previously.

The ringgit traded mixed against its Asean peers.

It climbed against the Singapore dollar to 3.1724/3.1793 from 3.1753/3.1791 and advanced against the Thai baht to 12.0024/12.0400 from 12.0373/12.0561 previously.

The local currency was flat against the Indonesian rupiah at 223.4/224.0 and the Philippine peso at 6.36/6.38, compared with last Friday’s close.

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