KUALA LUMPUR, May 26 — The ringgit rebounded sharply versus the greenback as US debt ceiling negotiations made headway, with the local currency also strengthening against other major and regional currencies.
At 6pm, the local currency was trading at 4.5970/6035 per US dollar, up from the previous day's close of 4.6245/6285.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit regained some ground today, hovering at the RM4.6082 level.
"There appears to be positive news flow on the US debt limit discussion, with some spending cuts in certain areas. If US lawmakers could agree on the debt ceiling sooner, a risk-on approach would prevail,” he told Bernama, adding that from now to June 1, all eyes will be on the US debt ceiling talks. Traders have rushed to safe-haven assets amid the talks.
"The prevailing US dollar-ringgit of RM4.6125 was a tad lower from the immediate resistant level of RM4.6257 and it is deemed to be oversold based on the technical indicators,” he said.
Mohd Afzanizam said in light of the ongoing US debt drama and the effect of past interest rate hikes, the global economic outlook in the second half of this year is expected to be challenging.
"That would mean keeping the overnight policy rate (OPR) steady would best serve the interest of the economy, especially on investment,” he said in a research note today.
He reiterated the bank’s stance that the OPR would be left unchanged at 3.00 per cent in 2023.
At today’s close, the ringgit appreciated against a basket of major currencies.
It appreciated further vis-a-vis the British pound to 5.6819/6899 from 5.7247/7296 at the close on Thursday, closed better against the euro at 4.9340/9409 from Thursday’s 4.9630/9673 and rose against the Japanese yen to 3.2918/2967 from 3.3141/3172 yesterday.
The local note was traded slightly higher against other Asean currencies, which have also suffered as a result of the continuing US debt ceiling talks, with the Philippine peso leading the way, losing 0.49 per cent versus the US dollar, followed by the Thai baht (0.07 per cent).
The ringgit rebounded to 3.4012/4062 against the Singapore dollar from 3.4202/4237 yesterday and went up versus the Indonesian rupiah to 307.3/307.9 from 309.2/309.6 at Thursday’s close.
It edged up against the Philippine peso to 8.24/8.25 from 8.25/8.26 and was at 13.2539/2784 against the Thai baht from 13.3602/3776 previously. — Bernama