THE Malaysian ringgit opened firmer against the US dollar this morning, following the US Federal Reserve's recent indication that it is not in a hurry to implement interest rate cuts.
As of 8 a.m., the ringgit was trading at 4.4660/4730 against the greenback, showing a slight improvement from its previous close of 4.4680/4730 on Monday.
Dr. Mohd Afzanizam Abdul Rashid, Chief Economist at Bank Muamalat Malaysia Bhd, pointed out that the Dollar Index (DXY) had decreased by 0.37% to 107.922 points.
This drop comes after US Federal Reserve Chairman Jerome Powell emphasised the central bank’s stance of not rushing into decisions regarding reducing policy rates.
Afzanizam explained that while there seems to be a general expectation for the Federal Reserve to lower its key interest rate in the future, the timing and extent of such a move remain uncertain.
Powell’s recent remarks signal that the Fed is adopting a cautious approach in determining when and how much to adjust the policy rate, leading to a softer tone in the US dollar.
This cautious approach by the Fed has had a notable impact on the US dollar’s value, which in turn benefits the Malaysian ringgit and other currencies in the region.
The movement in the currency markets reflects the ongoing global uncertainty around interest rate policies and their potential effects on economic growth. – February 12, 2025
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