KUALA LUMPUR: The ringgit has appreciated by 7.86 per cent year-to-date, reaching another 20-month high against the US dollar as the markets approach the United States Federal Open Market Committee (FOMC) meeting.
At 6 pm, the local note rose to 4.2535/2645 versus the greenback from last Friday’s close of 4.2975/3050.
Markets were closed on Monday, Sept 16, 2024, in observance of Prophet Muhammad’s birthday and the Malaysia Day public holiday.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid the fall in the US dollar Index (DXY) to around 100 points might imply that the US Federal Reserve (Fed) might prescribe an aggressive interest rate cut this week.
"Perhaps, front-loading the rate cuts by 50 basis points would alleviate concern over a possible slowdown in the economy and the Fed must exhibit their resolve to ensure maximum employment goals can be achieved.
"The timing and the size of the rate reduction matters for ensuring the success in achieving stable growth going forward,” Mohd Afzanizam told Bernama.
He said the ringgit is likely to be the main beneficiary of the currency market movement as it would allow a narrower interest rate gap between the Fed Fund Rate (FFR) and the overnight policy rate (OPR) going forward.
Year-to-date, the ringgit also improved by 5.65 per cent against the Singapore dollar to 3.2891/2979 against 3.3098/3159 last Friday.
Meanwhile, the ringgit was traded higher against a basket of major currencies at today’s close.
It appreciated versus the euro to 4.7375/7498 from 4.7664/7747 at last Friday’s close, gained against the British pound to 5.6240/6385 from 5.6439/6538, and improved vis-a-vis the Japanese yen to 3.0244/0324 from 3.0570/0625 previously.
Besides the improvement against the Singapore dollar, the ringgit also traded firmer against ASEAN currencies.
It gained against the Indonesian rupiah to 277.3/278.2 from 278.9/279.6, increased against the Philippine peso to 7.64/7.66 from 7.67/7.69, and was higher versus the Thai baht to 12.7725/8105 from 12.8907/9190 previously. - Bernama
