KUALA LUMPUR – The ringgit opened firmer against the US dollar ahead of Bank Negara Malaysia’s (BNM) Monetary Policy Committee (MPC) meeting today, with the market expecting a 25 basis-point cut in interest rates.
At 9.10am, the local currency was traded at 4.1520/1560 versus the US dollar compared with yesterday’s close of 4.1550/1600.
Axi chief global market strategist Stephen Innes said however, the central bank is expected, by a wide margin, to keep its key rate unchanged as political uncertainty and a resurgence of Covid-19 cases hang like ominous clouds above Malaysia’s capital market.
“Still, unlike most Asian peers, BNM has sufficient policy wiggle room to thwart negative inflation.
“Simultaneously, there is limited leeway for fiscal policy expansion after a record stimulus unleashed earlier this year. So, it could be up to BNM to do much of the heavy lifting for the economic recovery from here forward,” he told Bernama.
Innes said next on tap will be Budget 2021 which will be tabled on Friday.
Meanwhile, the ringgit was traded mixed against other major currencies.
It declined against the Singapore dollar to 3.0422/0460 from 3.0413/0461 yesterday and fell against the British pound to 5.3669/3725 from 5.3629/3701.
The ringgit, however, strengthened against the euro to 4.8346/8397 from 4.8360/8435 and was higher vis-a-vis the yen at 3.9633/9673 from 3.9639/9698. – Bernama, November 3, 2020
