Ringgit opens firmer against greenback after Bank Negara holds OPR

On Friday, the Malaysian ringgit opened stronger against the US dollar, supported by a positive sentiment following Bank Negara Malaysia's decision to keep its overnight policy rate (OPR) unchanged at 2.75 per cent. By 8am, the local currency climbed to 4.0370/0420 against the greenback, from Thursday's closing rate of 4.0405/0445.

The Monetary Policy Committee (MPC) of Bank Negara Malaysia had maintained the OPR at 2.75 per cent on Thursday. Analyst Dr Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia Bhd noted that the MPC's decision to keep the OPR steady, even with strong growth and manageable inflation, indicated that Malaysia's economy was in a favorable position.

This situation offered support to the ringgit, as the central bank's policy flexibility could attract more investors to hold the currency, according to Dr Afzanizam. The ringgit also benefited from a weaker US dollar due to remarks from US Federal Reserve Governor Christopher Waller. Waller's comments suggested that he would favor maintaining interest rates unchanged if inflation continued to ease towards the Fed's two per cent target, which put additional downward pressure on the greenback.

This US dollar weakness positively impacted emerging market currencies, including the ringgit. However, the ringgit weakened against other major currencies, including the Japanese yen, British pound, and euro, as well as regional currencies such as the Singapore dollar and Thai baht. It remained relatively stable against the Philippine peso and strengthened against the Indonesian rupiah.