Ringgit marginally lower against US dollar in early trade

At 9.02am, the local note stood at 4.3820/3860 versus the greenback compared with Tuesday’s close of 4.3800/3850. — Reuters pic
At 9.02am, the local note stood at 4.3820/3860 versus the greenback compared with Tuesday’s close of 4.3800/3850. — Reuters pic

KUALA LUMPUR, May 11 — The ringgit turned slightly lower against the US dollar today amid cautious sentiment ahead of Bank Negara Malaysia’s (BNM) interest rate decision later today, an analyst said.

At 9.02am, the local note stood at 4.3820/3860 versus the greenback compared with Tuesday’s close of 4.3800/3850.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said market players would react to BNM’s Monetary Policy Committee (MPC) meeting’s latest assessment on the economy, especially on the overnight policy rate (OPR).

“We shall see what would be their assessment on the economy and more importantly, whether there is going to be an interest rate hike derived from this meeting.

“We are of the view that BNM would maintain the prevailing OPR level, which is currently at 1.75 per cent, the lowest in history since the benchmark rate was introduced in April 2004,” he told Bernama.

While the case for higher OPR is building up, Mohd Afzanizam expects BNM may just want to keep it steady as inflationary pressures are still within their tolerance level.

“In that sense, the US dollar-ringgit would remain stable at around the RM4.38 level,” he said.

He said this is because the focus tonight is on the US Consumer Price Index (CPI) for April 2022 whereby the consensus on CPI inflation is that it would slightly moderate to 8.1 per cent based on estimates from 8.5 per cent in the preceding month.

“It is still elevated and therefore, the US Federal Reserve (Fed) will remain hawkish. In short, the US dollar will remain strong in the near future,” he added.

Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.

The local note rose versus the Japanese yen to 3.3612/3645 from Tuesday’s close of 3.3643/3684 yesterday, appreciated slightly against the Singapore dollar to 3.1496/1529 from 3.1499/1540, and perked against the euro to 4.6147/6189 from 4.6156/6209.

However, it declined vis-a-vis the British pound to 5.3973/4022 from 5.3909/3971. — Bernama