KUALA LUMPUR (May 7): The ringgit opened slightly higher against the US dollar today after Bank Negara Malaysia (BNM) maintained its interest rate at 1.75%, signalling that Malaysia’s economic recovery is on track, dealers said.
At 9am, the local currency had risen to 4.1190/1240 against the greenback from yesterday’s close at 4.1200/1240.
ActiveTrades trader Dyogenes Rodrigues Diniz said the central bank’s decision to leave the interest rate unchanged will help the economy to grow again.
“The central bank’s decision is in line with the monetary policies of central banks around the world, which are also maintaining interest rates low in an effort to strengthen their economies, promote employment and fight the negative effects of the Covid-19 pandemic,” he told Bernama.
However, he said the downside risk for keeping the interest rate unchanged might see the ringgit continue to devalue against its counterparties over the next few days.
“From a technical point of view, if the price manages to break the 4.1250 level, the US dollar to ringgit [exchange rate] may reach the 4.1500 price level by the end of May,” he added.
Yesterday, the BNM maintained the overnight policy rate (OPR) after its third Monetary Policy Committee (MPC) meeting.
The central bank said the latest indicators pointed to continued improvement in economic activity in the first quarter and into April.
The central bank said while the reimposition of the movement control order (MCO) in selected locations will affect economic activity in the short term, the impact will be less severe as almost all economic sectors are allowed to operate.
At the opening today, the ringgit was traded mixed against other major currencies.
Against the British pound, it strengthened to 5.7238/7315 from 5.7330/7402, and increased against the yen to 3.7741/7790 from 3.7750/7790 at yesterday’s close.
Vis-à-vis the Singapore dollar, the ringgit fell to 3.0877/0931 from 3.0861/0903, and declined against the euro to 4.9679/9756 from 4.9625/9690.-BERNAMA