On Friday, the Malaysian ringgit strengthened against the US dollar due to the Overnight Policy Rate (OPR) increasing to 3.00%. However, the ringgit-dollar pairing was expected to trade in a narrow range as investors became risk-averse, leading to an increase in demand for the US dollar.
Ringgit’s rise due to OPR rates
Mohd Afzanizam Abdul Rashid, the Chief Economist and Head of Social Finance at Bank Muamalat Malaysia, noted that there was not a significant amount of risk-averse sentiment in the market at this time. The increase in the ringgit was due to the Bank Negara Malaysia (BNM) raising the OPR, but it was expected that the impact of this action would be limited.
The ringgit was expected to remain stable due to the possibility of the US Federal Reserve temporarily halting interest rate hikes and weak global growth prospects. The Malaysian currency was also trading lower against major currencies like the yen, the pound, and the euro, but it increased against the peso and the rupiah.
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