KUALA LUMPUR, July 7 — The ringgit ended unchanged against the US dollar today, as Bank Negara Malaysia (BNM) slashed the overnight policy rate (OPR) by another 25 basis points at its Monetary Policy Committee’s (MPC) meeting today.
As at 6pm, the ringgit remained at yesterday’s close of 4.2750/2800 against the greenback.
In its fourth meeting of the year, the MPC reduced the OPR to 1.75 per cent, a record low since the floor was set in 2004.
It also decided to have the ceiling and floor rates of the corridor of the OPR correspondingly reduced to 2.00 per cent and 1.50 per cent, respectively.
AxiCorp chief global market strategist Stephen Innes said the ringgit strengthened earlier on the back of the bond market rally as Malaysian Government Securities drew quick demand.
However, the momentum faded as local equity markets struggled in the face of the Melbourne lockdown after Covid-19 cases surged in the Australia’s second-biggest city.
“If inflation remains persistently low the BNM has left the door open for another rate cut or two which will likely have a muted effect on the currency as real yields in Malaysia remain high,” Innes said in a note today.
Malaysia’s consumer price index declined 2.9 per cent year-on-year in May 2020, unchanged from April 2020.
Meanwhile, the ringgit was traded higher against other benchmark currencies.
The local note rose against the Singapore dollar to 3.0164/0659 from 3.0698/0745 yesterday and strengthened against the yen to 3.9679/9729 from 3.9745/9803.
The ringgit also advanced against the British pound to 5.3326/3410 from 5.3420/3500 and appreciated against the euro to 4.8188/8257 from 4.8273/8347. — Bernama