Ringgit slips against US dollar, but gains on euro, yen and pound as markets digest US Fed rate hike

KUALA LUMPUR, Sept 17 – The Malaysian ringgit showed mixed performance against major currencies on Thursday, as investors assessed the US Federal Reserve's latest interest rate decision, according to an analyst. By 6 pm, the local currency slipped to 4.0965/1010 against the US dollar, down from Tuesday's closing rate of 4.0835/0880.

The market was shut for a public holiday the day prior. The ringgit hit a low of 4.1012 at 9:13 am before rebounding and closing at 4.0965. The US central bank had raised the federal funds rate target range to 3.75–4.00 percent from 3.50–3.75 percent the previous day. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid suggested that the Fed might not be finished with its 25-basis-point rate hike, with additional increases possible as the US central bank persists in its efforts to bring inflation down to its 2 percent goal.

"Tomorrow, the market will be focusing on the Bank of Japan's (BOJ) rate decision. Given the expectations of a possible 25-basis-point increase, market sentiments are expected to remain cautious amid the restrictive monetary policy stance of major central banks," Dr Rashid told Bernama. The closing rates showed the ringgit gaining against the euro (4.7003/7055), gaining against the yen (2.6305/6336), and advancing against the British pound (5.4877/4937).

However, it eased against the Singapore dollar (3.2099/2137) and slipped against the Thai baht (12.2734/2917). It also dipped against the Philippine peso (6.53/6.54) and remained unchanged against the Indonesian rupiah (230.7/231.1).