KUALA LUMPUR, May 7 — The ringgit opened slightly higher against the US dollar on Friday after Bank Negara Malaysia (BNM) maintained interest rate at 1.75 per cent, signalling Malaysia’s economic recovery is on track, dealers said.
At 9am, the local currency rose to 4.1190/1240 against the greenback from Thursday’s close of 4.1200/1240.
ActiveTrades trader Dyogenes Rodrigues Diniz said the central bank’s decision to leave the interest rate unchanged will help the economy to grow again.
“The central bank’s decision is in line with the monetary policies of central banks around the world, that are also maintaining interest rates low in an effort to strengthen their economies, promote employment and fight the negative effects of the Covid-19 pandemic,” he told Bernama.
However, he said the downside risk for keeping the interest rate unchanged might see the ringgit likely to continue to devalue against its counterparties over the next few days.
“From a technical point of view, if the price manages to break the 4.1250 level, the US dollar to ringgit may reach the 4.1500 price level by the end of May,” he added.
Yesterday, the BNM maintained the overnight policy rate (OPR) after its third Monetary Policy Committee (MPC) meeting.
The central bank said the latest indicators pointed to continued improvements in economic activity in the first quarter and into April.
The central bank said while the re-imposition of the Movement Control Order in selected locations would affect economic activity in the short term, the impact would be less severe as almost all economic sectors were allowed to operate.
At the opening today, the ringgit was traded mixed against other major currencies.
Against the British pound, it strengthened to 5.7238/7315 from 5.7330/7402 and increased against the yen to 3.7741/7790 from 3.7750/7790 at Thursday’s close.
Vis-à-vis the Singapore dollar, the ringgit fell to 3.0877/0931 from 3.0861/0903 and declined against the euro to 4.9679/9756 from 4.9625/9690.
— Bernama
