Ringgit opens flat against US dollar

Ringgit opens flat against US dollar
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KUALA LUMPUR (July 4): The ringgit opened flat on Monday (July 4) against the US dollar ahead of the Bank Negara Malaysia (BNM) Monetary Policy Committee meeting scheduled for this week although demand for the greenback remained strong due to its safe-haven status, an analyst said. 

At 9am on Monday, the local currency stood at 4.4060/4100 against the US dollar, compared with 4.4060/4085 at the close last Friday.

Bank Islam Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit is expected to remain stable at around 4.40 against the greenback on Monday.

"The possibility of a higher overnight policy rate (OPR) this week could sustain the value of the ringgit.

"The negative real rate of interest at the moment could motivate BNM to raise the OPR in order to incentivise savers to place their savings in bank deposits and to avoid excessive risk-taking behaviour," he told Bernama.

However, SPI Asset Management managing partner Stephen Innes opined that ongoing global growth concerns could dampen enthusiasm for the ringgit.

"In a slower global growth environment, emerging market currencies and especially commodity exporters tend to trade weaker during the initial phase of the downturn," he said.

The ringgit traded lower against a basket of major currencies except the Singapore dollar.

The local currency was lower against the British pound at 5.3326/3374 against last Friday’s close at 5.3163/3193, weakened versus the Japanese yen to 3.2644/2676 from 3.2483/2504 previously and fell vis-a-vis the euro to 4.5963/6005 from 4.5060/6086.

However, it appreciated against the Singapore dollar to 3.1550/1583 from 3.1596/1618 last Friday.