KUALA LUMPUR, March 16 — The ringgit opened flat against the US dollar for the second consecutive day Tuesday, as trading remained subdued ahead of the Federal Open Markets Committee (FOMC) meeting on March 16 and 17.
At 9am, the local note stood at 4.1115/1165 against the greenback versus 4.1110/1160 at Monday’s close.
However, Axi chief global market strategist Stephen Innes said the ringgit was supported by Bank Negara Malaysia’s (BNM) rate-swap move which comes into effect Monday.
Last week, BNM announced that effective March 15, non-resident banks may trade ringgit-denominated interest rate swap (IRS) without any underlying commitment with any onshore bank or its appointed overseas offices.
“The central bank’s move will allow investors to better hedge bond portfolios, as allowing onshore banks’ access to this derivative market will add much-needed liquidity in the Malaysian IRS market, “ he told Bernama.
In addition, Innes said BNM’s move would simultaneously address some lingering foreign investors’ hedging concerns, as the FTSE Russell is set to publish its biannual fixed income review on March 29, as Malaysia remains precariously perched on the watchlist for possible exclusion.
“I think the general improving risk on tone is helping the ringgit,” he added.
At the opening bell, the local currency was traded higher against other major currencies.
It increased against the Singapore dollar to 3.0548/0592 from Monday’s close of 3.0558/0602 and went up vis-a-vis the euro to 4.9017/9093 from 4.9028/9106.
The ringgit also appreciated against the yen to 3.7630/7687 from 3.7678/7727 and strengthened against the British pound to 5.7080/7162 from 5.7274/7361 previously.
— Bernama
