KUALA LUMPUR, Dec 14 — The ringgit rebounded after three consecutive days of losses to close higher against the US dollar today as the US Federal Reserve (Fed) signalled its intention to cut the Federal Funds Rate (FFR) in 2024.

At 6pm, the ringgit rose to 4.6695/6745 against the greenback from yesterday’s close of 4.7035/7085.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said the Federal Open Market Committee (FOMC) has opted to keep the FFR steady at 5.25-5.50 per cent following its latest meeting.

“This decision comes after a period of robust economic growth in the third quarter of 2023 (3Q 2023), where the gross domestic product expanded by an impressive 5.2 per cent on a seasonally adjusted annualised rate, a significant increase from the 2.1 per cent growth seen in 2Q 2023.

“A growing number of participants are now suggesting that the FFR could be reduced to the range of 4.5-5.0 per cent in 2024, with 11 members in agreement, up from seven in the September forecast,” he told Bernama.

He said the overall sentiment among the FOMC members appears to be more dovish with a consensus that further rate cuts may be necessary to guide the economy towards a ‘soft landing’, especially after a

cumulative increase of 525 basis points in the rate since March 2022.

“Going forward, the market will be looking for any signs of economic weaknesses in order to synthesise the timing for the rate cuts in 2024.

“The decline in bond yields indicates that the bond market players are expecting a lower interest rate environment in 2024,” he said.

At the close, the ringgit traded weaker versus a basket of major currencies.

It fell against the British pound to 5.9130/9193 from 5.8916/8979 at yesterday’s close, depreciated vis-a-vis the euro to 5.0888/0943 from 5.0737/0791 yesterday and slipped against the Japanese yen to 3.2977/3014 from 3.2249/2285 previously.

The ringgit was also traded lower against a few Asian currencies although it appreciated against the Philippines’ peso to 8.37/8.38 from yesterday’s closing rate of 8.39/8.40.

It was easier against the Indonesian rupiah at 301.1/301.6 from 300.2/300.8 at yesterday’s close, edged down versus the Singapore dollar to 3.5101/5141 from 3.5001/5041 and fell against the Thai baht to 13.3205/3424 from 13.1390/1592 previously. — Bernama