KUALA LUMPUR, May 8 ― The ringgit opened slightly lower against the US dollar today on lack of fresh buying interest, said a dealer.
At 9am, the ringgit was lower at 4.1480/1510 to the greenback compared with 4.1470/1500 at yesterday’s close.
It was the local unit’s weakest performance since Jan 3, 2019, when it ended at 4.1460/1500 versus the greenback.
FXTM's market analyst, Han Tan, said the relatively muted reaction suggested that markets had largely priced in yesterday’s monetary policy decision, given that Bank Negara Malaysia (BNM) had guided in March that the central bank will pre-emptively build policy space and buffers.
“The lowered benchmark interest rate is expected to ensure domestic demand continues to drive economic growth momentum, as Malaysia contends with “considerable downside risks” and “heightened uncertainties” on the global stage, as mentioned in BNM’s latest monetary policy statement,” he told Bernama.
BNM cut the overnight policy rate (OPR) by 25 basis points to 3.00 per cent.
In a statement yesterday, the central bank said the adjustment to the OPR was intended to preserve the degree of monetary accommodativeness.
“This is consistent with the monetary policy stance of supporting a steady growth path amid price stability,” it said.
BNM made the last change to the OPR rate on January 25, 2018, when it increased the rate by 25 basis points to 3.25 per cent.
Tan said moving forward, FXTM expects external factors beyond Malaysian policymakers’ control will continue to be the primary driver for the ringgit’s performance.
Overall, the ringgit traded mostly higher against a basket of major currencies, except against the Japanese yen where it slipped to 3.7654/7692 from Tuesday’s close of 3.7506/7540.
The local note strengthened against the Singapore dollar to 3.0437/0471 from 3.0446/0472 yesterday, rose against the euro to 4.6433/6479 from 4.6455/6505 and appreciated against the British pound to 5.4231/4274 from 5.4288/4340. ― Bernama
