KUALA LUMPUR, July 13 — A cut in the overnight policy rate (OPR) by Bank Negara Malaysia, which would help propel steady economic growth, has helped lift the ringgit higher against the US dollar today, dealers said.
At 5pm, the ringgit stood at 3.9690/9740 versus the greenback from 3.9785/9825 yesterday.
A dealer said the move by the central bank would ensure that the economy continued to grow, amid the challenging external environment.
Affin Hwang Investment Bank Vice-President and Head of Retail Research Datuk Dr Nazri Khan Adam Khan said the OPR cut would not have an adverse impact on the ringgit, unless there were more foreign investments coming into the country.
The investment bank’s official fair value for the ringgit this year is between 3.95 and 4.00.
BNM in a surprise move cut the OPR by 25 basis points to 3.00 per cent, the first since 2009, to ensure the economy remains on a strong trajectory.
Today, the local note was traded mostly higher, except with the British pound where it declined sharply to 5.2637/2715 from 5.2309/2382 yesterday. The British pound was traded higher following United Kingdom’s (UK) announcement that Theresa May will take over as Prime Minister effective today.
Add to that, news that the Bank of England is considering a cut in its benchmark interest rate to a new low also further cushioned the UK economy and its currency after having exited the European Union.
Against the Singapore dollar, the ringgit rose to 2.9446/9492 from 2.9512/9548 while versus the yen, it advanced to 3.8039/8098 from 3.8477/8527. The local note strengthened vis-a-vis the euro to 4.3889/3960 from 4.4197/4254 yesterday. — Bernama
