Ringgit opens higher vs US dollar on fiscal discipline pledge

KUALA LUMPUR: The Malaysian ringgit opened higher against the US dollar on Monday, bolstered by the government's pledge to maintain fiscal discipline following the unveiling of Budget 2027 last Friday. At 8am, the ringgit climbed to 4.0820/4.0880 against the greenback, up from its closing rate of 4.0830/4.0875 on Friday. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid noted that the government's commitment to fiscal prudence is evident in its aim to reduce the fiscal deficit to 3.3% of gross domestic product in 2027, down from an estimated 3.6% this year.

Rashid believes this pragmatic approach will safeguard Malaysia's sovereign credit rating, offering a strong foundation for the ringgit. However, he cautioned that external factors, particularly developments in the Middle East, could affect global crude oil prices and thus pose uncertainties. The ringgit's performance against a basket of currencies is expected to remain within a narrow range today, he said, as traders keep an eye on potential interest rate hikes by the US Federal Reserve this month.