If the global trend of keeping the policy rates unchanged (or reduced) continues, the ringgit is poised for a recovery, says analysts.
KUALA LUMPUR: The ringgit opened marginally higher against the US dollar on the last trading day of the week, as several major central banks took a break from raising interest rates this week.
On the home front, Bank Negara Malaysia’s monetary policy committee maintained the Overnight Policy Rate at 3% yesterday at its last meeting of the year. At 9.05am, the ringgit appreciated slightly to 4.7470/4.7525 against the greenback from yesterday’s close of 4.7485/4.7525. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US Federal Reserve and the Bank of England are among the major central banks that have decided to keep their policy rates unchanged.“For example, China has lowered its one-year medium-term lending facility rate by 25 basis points to 2.5%. Similarly, Brazil and Chile have both cut their benchmark interest rates by 150 bps and 225 bps, bringing them to 12.25% and 9%, respectively.
Consequently, Afzanizam anticipates the ringgit to perform better today on the possibility that global benchmark interest rates have reached their peak.The ringgit rose against the Japanese yen to 3.1552/3.1591 from 3.1593/3.1622 on Thursday, higher against the euro at 5.0399/5.0457 from 5.0448/5.0491, and climbed against the British pound to 5.7847/5.7914 from 5.7860/5.7909 yesterday.It appreciated against the Singapore dollar to 3.4784/3.4827 from 3.4798/3.
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