Ringgit opens higher at RM4.2145/USD as US inflation data fuels expectations of Federal Reserve interest rate cuts, narrowing policy gap with Malaysia.
KUALA LUMPUR: The ringgit opened higher against the US dollar on Monday as investors awaited the Federal Open Market Committee meeting.
At 8 am, the local currency appreciated to RM4.2145/2350 against the greenback from Friday’s close of RM4.2210/2255.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said September’s 3% consumer price index print fell below the 3.1% consensus estimate.
“This suggests that the US Federal Reserve is on track to deliver its second interest rate cut with possibly more cuts in 2026,” he told Bernama.
He noted the US central bank has shifted its focus to reviving the job market.
“It means that the interest rate differential between the Fed fund rate and overnight policy rate will be narrowing in the near future,” he said.
Mohd Afzanizam said Bank Negara Malaysia is in no hurry to cut the OPR.
Therefore, he expects the benchmark interest rate to remain steady for the remainder of 2025.
“From a policy rate perspective, it should be ringgit-positive,” he added.
He projected the dollar-ringgit pair would linger between RM4.21 and RM4.22 today.
Mohd Afzanizam also highlighted that US President Donald Trump’s presence at the ASEAN Summit benefits Malaysia.
This indicates the US supports global trade and open negotiations for win-win solutions.
Hence, this provides additional support for the ringgit over the mid to long term.
The ringgit traded mostly higher against major currencies at opening.
It inched up against the Japanese yen to 2.7553/7689 from 2.7592/7623.
The local currency advanced against the British pound to 5.6150/6423 from 5.6232/6292.
However, it declined versus the euro to 4.9023/9262 from 4.9010/9062.
The ringgit was traded mostly higher against ASEAN currencies.
It appreciated against the Singapore dollar to 3.2472/2632 from 3.2484/2521.
The local note strengthened versus the Philippine peso to 7.18/7.22 from 7.20/7.21.
It edged up against the Indonesian rupiah to 253.8/255.2 from 254.2/254.6.
The ringgit weakened versus the Thai baht to 12.8939/9630 from 12.8768/8952. – Bernama
