KUALA LUMPUR, May 7 — The ringgit is expected to remain volatile in the near term alongside other emerging market currencies.
Erratic currency trading is also anticipated to be weighed by the US Federal Reserve monetary tightening phase as well as monetary policy divergence in key jurisdictions such as China and Japan, which prefer policy accommodation as a way to help revive their economy.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the US dollar has become highly favourable as their rates of return would be far more attractive by the end of the year.
“At the moment, the support level for the local note against the greenback stands at RM4.3420 and the resistant level is located at RM4.4490,” he told Bernama.
Mohd Afzanizam also said the dollar-ringgit would gyrate within this trading band next week and all eyes will be on Bank Negara Malaysia’s (BNM) Monetary Policy Committee meeting on May 10-11 in order to gauge their latest economic assessment and decide on the overnight policy rate (OPR).
“The first-quarter gross domestic product will be out Friday next week, so there is a lot to digest on the domestic front,” he said.
Meanwhile, BNM is expected to maintain the OPR at 1.75 per cent and the central bank would be observing the first quarter of economy data scheduled to be released on May 13.
On a weekly basis, the ringgit was lower against the greenback at 4.3650/3680 on Friday, compared to 4.3520/3570 a week earlier.
The ringgit, however, was traded mixed against a basket of major currencies on a Friday-to-Friday basis.
The ringgit rose against the Singapore dollar to 3.1523/1549 from 3.1543/1584 a week earlier and improved against the British pound to 5.3868/3905 from 5.4652/4715 last week.
It, however, declined vis-à-vis the Japanese yen to 3.3453/3479 from 3.3392/3433 and weakened versus the euro to 4.6138/6170 from 4.6018/6071 previously.
— Bernama
