Ringgit Buoys on Fed's Rate Decision

The ringgit opened higher against the US dollar on July 30, following the US Federal Reserve's decision to keep interest rates steady. The local currency rose marginally to 4.0850/0920 against the greenback from 4.0875/0915 at yesterday's close.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the US dollar index (DXY) fell 0.57 per cent to 100.842 points, as the Fed decided to keep its target benchmark Federal Funds Rate between 3.50 per cent and 3.75 per cent.

The decision was not unanimous, with three out of 12 voting members opting for a rate hike, according to Dr Afzanizam. The West Texas Intermediate (WTI) and Brent crude oil prices rose by 6.56 per cent and 8.12 per cent to $84.46 per barrel and $90.92 per barrel respectively.

The ringgit is expected to maintain its tight range, with some degree of appreciation against the US dollar, said Dr Afzanizam. The local currency traded lower against a basket of major currencies at the opening, but rose versus the Indonesian rupiah to 226.0/226.5 from 226.1/226.5.