Ringgit eases slightly against greenback ahead of BNM’s OPR decision

KUALA LUMPUR — The ringgit ended slightly lower against the US dollar at Wednesday’s close ahead of Bank Negara Malaysia’s (BNM) overnight policy rate (OPR) decision tomorrow, said an analyst.

At 6pm, the local note inched lower to 4.2360/2435 versus the greenback compared to Tuesday’s close of 4.2285/2360.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the Monetary Policy Committee (MPC) would deliberate on the OPR decision, with economists expressing varied opinions on the likely outcome.

“Some (economists) have pencilled in for a 25 basis points cut while others are of the view that the benchmark interest will stay unchanged at 3.00 per cent,” he told Bernama.

Mohd Afzanizam said geopolitical risks are once again on traders’ radar, with the latest military encounter between India and Pakistan having led to anxiety over how it might impact the global economy.

“Additionally, the ringgit continues to depreciate against the US dollar for two consecutive days after the US dollar-ringgit reaches RM4.20 on Monday.

“This is in tandem with other currencies’ performance, with the US Dollar Index (DXY) up by 0.24 per cent to 99.478 points,” he said.

SPI Asset Management managing partner Stephen Innes said the ringgit was leaning slightly weaker ahead of the Federal Open Market Committee meeting outcome.

“The US Federal Reserve is likely to keep interest rates unchanged, though its messaging may lean toward a neutral or slightly hawkish stance.

“In contrast, BNM may adopt a softer tone tomorrow, given the weakening domestic economic conditions. This policy divergence continues to weigh on the ringgit,” he noted.

At the close, the ringgit traded lower against a basket of major currencies.

It dropped versus the Japanese yen to 2.9556/9613 from 2.9502/9556 at Tuesday’s close, depreciated vis-a-vis the euro to 4.8104/8189 from 4.7824/7909 yesterday, and eased against the British pound to 5.6479/6579 from 5.6302/6402 previously.

Similarly, the ringgit performed weaker against its ASEAN peers.

It rose versus the Indonesian rupiah to 256.1/256.7 from Tuesday’s close of 257.0/257, declined versus the Singapore dollar to 3.2802/2862 from 3.2749/2812, and edged lower against the Philippine peso to 7.64/7.66 from 7.60/7.62 yesterday.

However, the local note remained stable against the Thai baht at 12.9383/9691, compared to Tuesday’s rate of 12.9399/9700. — BERNAMA