Selangor Journal
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Ringgit firmer against US dollar after Moody’s maintains rating

KUALA LUMPUR, Jan 29 — The ringgit closed January on a firm note against the US dollar as Moody’s Investors Service’s affirmation of Malaysia’s local and foreign currency long-term issuer ratings at A3, with a stable outlook, helped boost risk appetite for the local currency.

At the close, the ringgit rose to 4.0400/0450 versus the greenback from 4.0440/0470 on Wednesday.

Bank Islam Malaysia Bhd economist Adam Mohamed Rahim said the rating affirmation has spurred investors’ confidence towards Malaysia’s fiscal management.

“Back in December, Fitch Ratings had downgraded its rating on Malaysia. So, this latest rating is like a testament to the government’s management of fiscal position,” he told Bernama.

Yesterday Moody’s announced that it had affirmed Malaysia’s local and foreign currency long-term issuer and local currency senior unsecured debt ratings at A3 with a stable outlook.

It said the rating affirmation is underpinned by expectation that Malaysia’s medium-term growth prospects would remain strong, and the country’s macroeconomic policymaking institutions would continue to be credible and effective, providing resilience to the sovereign credit profile.

“These strengths are, under Moody’s baseline assumptions, balanced against the government’s relatively high and increased debt burden, which will leave the government with weakened fiscal strength for some time in the aftermath of the pandemic shock to public finances,” the rating agency said in a statement.

Meanwhile, Adam said the weaker US dollar, which was pressured by trading restrictions on GameStop shares, had partly contributed to lift sentiment towards ringgit.

Against other major currencies, the ringgit was traded broadly higher.

It appreciated against the Singapore dollar to 3.0369/0416 from 3.0491/0520 on Wednesday and increased versus the Japanese yen to 3.8524/8575 from 3.8956/8996 yesterday.

The local currency also strengthened against the British pound to 5.5207/5291 from 5.5536/5594 and advanced vis-a-vis the euro to 4.8945/9021 from 4.9021/9131 previously.

The local market was closed yesterday for the Thaipusam public holiday. 

 

— Bernama

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