Kuala Lumpur: The ringgit strengthened against the US dollar in early trade after reaching a nearly three-week high last Friday, buoyed by softer-than-expected US economic data released last week.
At 8am, the ringgit strengthened to 4.4140/4225 from 4.4165/4200 at Friday’s close.
Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said the local currency is expected to maintain its positive trend today after the US dollar-ringgit broke through its previous support level of RM4.43 last week.
He also said that Malaysia’s core inflation rate released last week saw an uptick to 1.8% during January from 1.6%, led by higher food inflation and a gradual increase in the transport sub-index.
“We believe it’s inflation expectation as the country awaits policy adjustment in fuel subsidies in the middle of this year.
“As such, the Bank Negara Malaysia is likely to keep the Overnight Policy Rate (OPR) steady at 3% throughout the year to strike the right balance between keeping the inflation risk at bay and supporting the growth, especially investment,” he told Bernama.
He added that with concerns over the inflation risk in the background, the ringgit could hover around RM4.40 to RM4.41 against the greenback.
Meanwhile, the ringgit was traded mostly higher against major currencies.
The ringgit gained against the British pound to 5.5828/5936 from 5.5851/5895 and inched up against the euro to 4.6232/6321 from 4.6236/6273 from last week’s close, but it slipped against the Japanese yen to 2.9547/9606 from 2.9346/9371 previously.
The ringgit weakened against most Asean currencies.
It depreciated against the Singapore dollar to 3.3039/3108 from 3.3021/3049 and fell against the Thai baht to 13.1447/1818 from 13.1354/1528.
The local note was marginally higher against the Indonesian rupiah at 270.5/271.2 from 270.7/271.0 and flat against the Philippine peso at 7.62/7.63 from last Friday’s closing of 7.62/7.63.
