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Wednesday, March 15, 2023

Ringgit extends gains on the greenback

 

KUALA LUMPUR: The riggit took advantage of a declining inflation trend and anticipation of softer interest rate hikes in the US to start the day ahead of the greenback.

The local currency rose from yesterday’s close of 4.4820/4.4860 to begin the day at 4.4795/4.4835 against the US dollar.

The US consumer price index (CPI) for February dropped to 6% from 6.4% in January as expected, ActiveTrades trader Dyogenes Rodrigues Diniz told Bernama.

“This suggests that inflation in the US is slowing down at the moment, thus the Federal Reserve may adopt a milder stance regarding the next interest rate decision on March 22,” he said.

Bank Muamalat Malaysia Bhd chief economist and social finance analyst Mohd Afzanizam Abdul Rashid said the latest inflation print “has left the Federal Reserve in a pickle”.

“On one hand, their concerns over stubbornly high inflation would mean they need to do more in raising the Fed Fund Rate.

“On the other spectrum, the heightening concern over the US banks such as the Silicon Valley Bank as well as Signature Bank serves as a reminder that overly tight monetary policy could do more harm than good,” he told Bernama.

As such, he said, the ringgit is likely to experience some form of correction today after staging a strong rebound in the past two days.

Meanwhile, the local note was traded mostly higher against a basket of major currencies.

It improved versus the British pound to 5.4444/5.4492 from 5.4474/5.4523 at yesterday’s close and firmed up against the Japanese yen to 3.3320/3.3352 from 3.3383/3.3415 yesterday, but fell vis-a-vis the euro to 4.8078/4.8121 from 4.8007/4.8050 previously.

At the same time, it was also traded mixed against its Asean counterparts.

The ringgit rose against the Thai baht to 12.9728/12.9896 from 12.9830/12.9999 yesterday and gained vis-a-vis the Indonesian rupiah to 291.10/291.50 from 291.20/291.70, but depreciated versus the Singapore dollar to 3.3285/3.3317 from 3.3254/3.3286 previously, and was unchanged vis-a-vis the Philippine peso at 8.13/8.14. - FMT

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