Ringgit opens higher as Budget’s fiscal discipline boosts sentiment

KUALA LUMPUR, Oct 12 — The Malaysian ringgit opened higher against the US dollar on Monday, buoyed by the government's pledge to fiscal discipline following the presentation of Budget 2027 last Friday. By 8am, the ringgit climbed to 4.0820/0880 against the greenback, from Friday's close of 4.0830/0875. Analyst Dr Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia Bhd attributed the optimism to the government's target of narrowing the fiscal deficit to 3.3% of gross domestic product in 2027, down from an estimated 3.6% this year.

He noted that this pragmatic approach would help safeguard Malaysia's sovereign credit rating, providing solid support for the ringgit.

However, Dr Rashid cautioned that external conditions remained uncertain, particularly geopolitical developments in West Asia and their potential impact on global crude oil prices. He indicated that market attention would be focused on whether the US Federal Reserve would consider further interest rate hikes this month. Consequently, analysts forecasted that the ringgit-US dollar pair would maintain its narrow range throughout the day.

Throughout the early trading session, the ringgit demonstrated strength against a variety of currencies. The local currency strengthened against the British pound, rising from 5.4063/4123 to 5.4038/4117 at the opening. Similarly, the ringgit gained against the euro, moving from 4.5807/5858 to 4.5735/5802. Conversely, it weakened against the Japanese yen, falling from 2.5791/5821 to 2.5806/5846.

Against ASEAN currencies, the ringgit edged higher against the Singapore dollar, climbing from 3.1896/1934 to 3.1876/1928, and against the Thai baht, increasing from 12.1735/1909 to 12.1720/1957. The local currency also ticked up against the Indonesian rupiah, moving from 228.1/228.4 to 228.0/228.4. However, it remained unchanged against the Philippine peso at 6.50/6.51.