KUALA LUMPUR, May 8 — The ringgit closed lower against the US dollar on Thursday as confidence in the greenback is deemed to have returned.
Meanwhile, Bank Negara Malaysia (BNM) has maintained the Overnight Policy Rate (OPR) at 3.00 per cent today.
At 6pm, the local note inched lower to 4.2780/2830 versus the greenback compared to Wednesday’s close of 4.2360/2435.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the Monetary Policy Committee (MPC) has decided to keep the OPR unchanged, citing that the global economy continues to grow along with domestic demand. However, the downside risk to growth has escalated.
“On that note, BNM has announced a 100 basis points cut in the Statutory Reserve Requirement (SRR). Such a move will add RM19 billion worth of liquidity into the system, which will translate into more lending and financing activities among banks.
“It appears that if there were more trade deals with the United States, it would lift the value of the US dollar as confidence in the greenback may have returned,” he told Bernama.
Afzanizam added that the US Dollar Index (DXY) continues to rise to 100.074 points as talks of possible trade deals with the US have gained momentum. Consequently, the ringgit depreciated by 0.82 per cent to RM4.27.
Elsewhere, SPI Asset Management managing partner Stephen Innes said the US Federal Open Market Committee's (FOMC) hawkish stance has also pushed the ringgit down today.
“With Wall Street futures gaining and trade-related macro uncertainty easing, the dollar’s previous headwinds are lifting. As a result, the greenback is showing renewed strength across the board,” he said.
At the close, the ringgit traded mostly lower against a basket of major currencies.
It gained versus the Japanese yen to 2.9534/9571 from 2.9556/9613 at Wednesday’s close, but eased vis-à-vis the euro to 4.8264/8321 from 4.8104/8189 yesterday, and dropped against the British pound to 5.6769/6835 from 5.6479/6579 previously.
Meanwhile, the ringgit was lower against its Asean peers.
It fell versus the Singapore dollar to 3.2984/3025 from 3.2802/2862 on Wednesday's close, depreciated against the Thai baht to 13.0189/0404 from 12.9383/9691 yesterday, and edged lower vis-à-vis the Indonesian rupiah to 259.2/259.6 from 256.1/256.7 previously.
The local note also inched lower against the Philippine peso to 7.69/7.70 from 7.64/7.66 yesterday.
— Bernama
