Ringgit hits near one-year high at 4.5675

 

KUALA LUMPUR: 

The ringgit continued its strong stride today, hitting a one-year high after strengthening against the US dollar for nine straight days.

An analyst said the positive market reaction to the Federal Open Market Committee’s (FOMC) meeting statement lifted the ringgit’s performance today.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the ringgit was persistently on an upward bias as the anticipation for the US rate cut is gaining further momentum post-FOMC meeting last night.

It was reported that the FOMC had maintained the Federal Funds Rate (FFR) at the 5.25%-5.5% target range.

“Perhaps the markets have come to the realisation that the Federal Reserve (Fed) is going to reduce the policy rates as it needs to shift its focus to preserve growth as inflation is expected to trend towards the 2% goal.

It appears that the two rate cuts are still on the cards based on the market expectation,

 he told Bernama.

Having said that, the interest rate differential between the FFR and the overnight policy rate (OPR) would narrow when the Fed starts to cut the rates.

That has helped improve the value of the ringgit as they see better prospects for the Malaysian currency,

 said Afzanizam.

UOB Kay Hian Wealth Advisors head of investment research Sedek Jantan expects that the strength of the dollar will begin to wane as demand for the currency declines with the Fed’s interest rate cuts.

We believe that robust growth fundamentals and a current account surplus will further support the continued appreciation of the ringgit,

 he said.

At 6pm, the ringgit surged 210 basis points to 4.5675/4.5710, compared to the greenback’s closing of 4.5885/4.5925 yesterday.

The previous high of 4.5865/4.5895 was registered on Aug 11, 2023.

The local note traded higher against a basket of major and Asean currencies.

The ringgit rose against the British pound to 5.8272/5.8317 from 5.8875/5.8926, appreciated against the euro to 4.9229/4.9266 from 4.9680/4.9723 and improved against the Japanese yen to 3.0450/3.0475 from 3.0515/3.0545 at yesterday’s close.

Among Asean currencies, the ringgit inched up against the Indonesian rupiah to 281.2/281.6 from 282.1/282.5 and improved against the Singapore dollar to 3.4124/3.4153 from 3.4273/3.4306 at the close yesterday.

It edged up against the Philippine peso to 7.83/7.84 from 7.86/7.87 and improved vis-a-vis the Thai baht to 12.8239/12.8384 from 12.8717/12.8880, previously. - FMT