Ringgit continues gains at opening after reaching near 3-week high last week

THE Malaysian ringgit extended its gains in early trading today, following a surge to a nearly three-week high last Friday, driven by weaker-than-expected US economic data.

At 8am, the ringgit was trading at 4.4140/4225 against the US dollar, an improvement from Friday's close of 4.4165/4200.

Bank Muamalat Malaysia Bhd's Chief Economist, Dr. Mohd Afzanizam Abdul Rashid, told Bernama today, the local currency is likely to sustain its positive momentum, particularly after the US dollar-ringgit pair breached its previous support level of RM4.43 last week. 

Bernama cited Afzanizam saying that Malaysia's core inflation rate, released last week, rose to 1.8% in January, up from 1.6% in December, driven by high food inflation and gradual increases in the transport subindex.

Th expert believes inflation expectations in the country will adjust following a mid-year policy shift on fuel subsidies.

As a result, Bank Negara Malaysia is expected to keep the Overnight Policy Rate (OPR) steady at 3.00% for the rest of the year to strike a balance between managing inflation risks and supporting growth, particularly in investment.

With inflationary concerns persisting, the Malaysian ringgit is expected to trade between RM4.40 and RM4.41 against the US dollar in the near term.

Meanwhile, the ringgit saw mixed movements against other major currencies. It strengthened against the British pound, rising to 5.5828/5936 from 5.5851/5895, and gained against the euro, moving to 4.6232/6321 from 4.6236/6273 last week.

However, it weakened against the Japanese yen, slipping to 2.9547/9606 from 2.9346/9371 previously.

The ringgit also traded lower against most ASEAN currencies.

It depreciated against the Singapore dollar, falling to 3.3039/3108 from 3.3021/3049, and weakened against the Thai baht, dropping to 13.1447/1818 from 13.1354/1528.

On the other hand, the local currency appreciated slightly against the Indonesian rupiah, rising to 270.5/271.2 from 270.7/271.0, and remained unchanged against the Philippine peso at 7.62/7.63 from last Friday. – February 24, 2025