Ringgit Strengthens After BNM Keeps OPR at 3%
The Ringgit Opens Higher Against Major Currencies
The ringgit opened higher against the US dollar and other major currencies, buoyed by Bank Negara Malaysia’s (BNM) Monetary Policy Committee’s (MPC) announcement on the Overnight Policy Rate (OPR). At 8 am, the ringgit stood at 4.4335/4500 against the US dollar compared to yesterday’s closing rate of 4.4340/4400.
BNM Maintains OPR at 3.0%
The central bank maintained the OPR at 3.0 per cent during its meeting yesterday. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid said the prevailing monetary policy stance is supportive towards the country’s growth.
Monetary Policy Effective in Containing Inflation
Mohd Afzanizam also noted that Malaysia’s inflation rate continues to decelerate to 1.7 per cent in December 2024 from a high of 2.0 per cent in July 2024, suggesting the monetary policy had been effective in containing the country’s inflation. He foresees that BNM is likely to keep the OPR steady throughout 2025 and it is expected to improve the value of the ringgit.
Ringgit to Remain Well-Supported in the Near Term
As such, the ringgit should remain well-supported in the near term but intermittently, some profit-taking activities would occur given the ringgit’s steep appreciation against the US dollar since January 13, 2025, where the ringgit has appreciated by 1.7 per cent.
Global Markets
Meanwhile, the US Dollar Index (DXY) inched up to 108.219 points from 108.062 points previously as the market continues to focus on US President Donald Trump’s policy announcement. The most recent one was the announcement of Project Stargate, which is the private sector-led project that focuses on investing in the artificial intelligence (AI) infrastructure. Technology-related stocks as represented by Nasdaq jumped 1.3 per cent last night to 20,009.3 points, while the 10-year US Treasury yielded three basis points higher to 4.60 per cent.
Ringgit Trade
At the opening, the ringgit traded higher against major currencies. It rose against the euro to 4.6144/6316 from Wednesday’s close of 4.6313/6376, advanced against the British pound to 5.4590/4793 from 5.4822/4896, and edged higher against the Japanese yen to 2.8336/8445 from 2.8480/8522.
ASEAN Currencies
The local note traded mixed against ASEAN currencies. It strengthened against the Thai baht to 13.0689/1249 from 13.1106/1345, and inched up against the Singapore dollar at 3.2710/2836 from 3.2781/2828. However, the local note traded almost flat against the Indonesian rupiah at 272.3/273.4 compared to 272.3/272.8, and against the Philippine peso at 7.58/7.61 versus Wednesday’s 7.58/7.59.
Conclusion
In conclusion, the ringgit has strengthened after BNM kept OPR at 3.0%, with the central bank’s prevailing monetary policy stance being supportive towards the country’s growth. The ringgit is expected to remain well-supported in the near term, but intermittently, some profit-taking activities would occur given the ringgit’s steep appreciation against the US dollar.
FAQs
* What is the current exchange rate of the ringgit against the US dollar?
The current exchange rate of the ringgit against the US dollar is 4.4335/4500.
* What is the Overnight Policy Rate (OPR)?
The OPR is the interest rate set by the central bank to regulate the money supply and control inflation.
* What is the current inflation rate in Malaysia?
The current inflation rate in Malaysia is 1.7 per cent as of December 2024.
* What is the expected direction of the ringgit in the near term?
The ringgit is expected to remain well-supported in the near term but intermittently, some profit-taking activities would occur given the ringgit’s steep appreciation against the US dollar.