KUALA LUMPUR (May 10): The ringgit opened slightly higher against the US dollar on Tuesday (May 10) ahead of Bank Negara Malaysia’s (BNM) Monetary Policy Committee meeting, which is scheduled for Wednesday.
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At 9.02am, the local note stood at 4.3820/3850 versus the greenback from Monday’s close at 4.3830/3870.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid expects BNM to keep the borrowing cost unchanged as the central bank would assess the country’s economy independently.
“The expected sharp increase in the US Federal Reserve (Fed) funds rate has led to a perception that other central banks would follow similar footsteps.
“While the Fed can be a trendsetter for rates, we think BNM would weigh various angles before it makes any move,” he told Bernama.
Mohd Afzanizam said fears over global growth prospects following the anticipated aggressive monetary tightening by the Fed had taken a serious toll on global equity markets.
He said it was definitely a risk-off mode whereby investors were seeking refuge over heightened uncertainties.
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“We could see the 10-year US Treasury yield has fallen by about five basis points to 2.98% at the moment, while the US dollar index rose 0.08% to 103.731 points,” he said.
Another analyst said the anticipation of stronger-than-expected gross domestic product data for the first quarter of 2022, to be released on Friday, would spur sentiment in the market.
Meanwhile, the ringgit was traded mostly lower against a basket of major currencies.
The local note decreased versus the Japanese yen to 3.3739/3767 from Monday’s close at 3.3407/3440, eased against the euro to 4.6274/6306 from 4.6135/6178 and weakened vis-a-vis the British pound to 5.4030/4067 from 5.3972/4022.
However, the ringgit appreciated against the Singapore dollar to 3.1469/1495 from Monday’s 3.1478/1509.-BERNAMA