KUALA LUMPUR: According to an analyst, investors are cautious following the US Federal Reserve’s (Fed) most recent evaluation of the status of the economy, which is why the ringgit opened somewhat lower against the US dollar today.
The ringgit fell against the US dollar at 9 am, closing at 4.7350/7400 from yesterday’s close of 4.7325/7380.
Mohd Afzanizam Abdul Rashid, the chief economist at Bank Muamalat Malaysia Bhd, stated that the Fed might stick to its plan and hold interest rates higher for a little while longer to keep the rate of inflation below the two per cent target.
A risk-off mindset seems to be in place right now, he added, since benchmark US stock prices dropped sharply yesterday night in anticipation of the Fed chairman’s appearance to the US Congress tomorrow.
Regarding the ringgit, the Monetary Policy Committee (MPC) meeting, where they will discuss their decision tomorrow, will also be of interest. The OPR would probably stay at 3%, according to Mohd Afzanizam.
However, he clarified that it is about how the MPC members view the economy, particularly about the prognosis for inflation, given the changes in tax policy and the depreciating value of the currency.
Therefore, Mohd Afzanizam continued, “The ringgit is likely to be in a narrow range of RM4.72 to RM4.73 today.”
In the meantime, the value of the ringgit decreased in relation to a major currency basket.
The local currency declined on Tuesday against the British pound, going from 6.0027/0097 to 6.0116/0179; it also declined against the euro, going from 5.1348/1407 to 5.1370/1424; and it declined against the Japanese yen, going from 3.1466/1505 to 3.1562/1598.
Simultaneously, the value of the ringgit declined in relation to other Asean currencies.
It was weaker against the Singapore dollar, narrowing to 3.5249/5289 from 3.5209/5253, and stronger against the Indonesian rupiah, narrowing to 300.2/300.6 from 300.0/300.5, and stronger against the Thai baht, closing at 13.2060/2254 from Tuesday’s close of 13.2119/2320. Bernama
