Selangor Journal
Malaysian ringgit notes are seen in this photo illustration. — File picture AFP PHOTO

Ringgit closes higher against US dollar after BNM maintains OPR at 2.75 pct

KUALA LUMPUR, Jan 19 — The ringgit closed higher versus the US dollar today, extending yesterday’s gains, after Bank Negara Malaysia (BNM) chose to keep the overnight policy rate (OPR) at 2.75 per cent, putting an end to market speculation about the rate hike cycle.

At 6pm, the ringgit appreciated to 4.3050/3100 against the greenback from yesterday’s close of 4.3130/3185.

SPI Asset Management managing partner Stephen Innes said the ringgit is getting a boost from a pro-growth move by BNM and the holding policy should provide a welcome boost to the economy.

“Markets and politicians alike should be happy with this dovish outcome and although trading on Bursa Malaysia is only up marginally, I suspect this is due to the global risk-off environment after fragile United States economic data sent recession fear tremors around the globe,” he told Bernama.

Innes added the message to start 2023 has been clear as a whistle. He said last year was about the normalisation of the US Federal Reserve and European Central Bank, and this year will be about China’s normalisation, which should continue to drive Asia’s fortunes higher in 2023.

“In 2022, Asian currencies underperformed, we foresee this year to see Asian currencies leading the charge and drive equity market inflows, especially from US investors that are profoundly worried about the erosion of the US dollar purchasing power,” Innes said.

He highlighted that Malaysia could be a destination for some of this investment flow as investors shift direction.

Meanwhile, the ringgit was traded mixed against a basket of major currencies.

The local note appreciated against the Singapore dollar at 3.2483/2523 from 3.2793/2840, strengthened versus the euro to 4.6602/6656 from 4.6878/6938 and improved to 5.3111/3172 against the British pound from 5.3300/3368 at Wednesday’s close.

The local unit, however, depreciated vis-à-vis the Japanese yen to 3.3544/3588 from 3.3331/3376 at yesterday’s close.

— Bernama

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