Ringgit Opens Mixed as BOJ Rate Hike Sparks Inflation Concerns

The Malaysian ringgit opened mixed against major and ASEAN currencies on Monday following the Bank of Japan's (BOJ) interest rate hike on Friday.

The BOJ raised interest rates by 0.25 per cent to 1.25 per cent, pushing borrowing costs to their highest level in 31 years.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said this had raised concerns about the ease of unwinding the yen carry trade and potentially higher inflation.

'In addition, higher crude oil prices could mean that inflation would remain elevated,' he told Bernama. 'This would provide the US Federal Reserve with a reason to continue raising interest rates by another 25 basis points later this year.'

The ringgit inched up against the euro but fell against the Japanese yen and depreciated against the Indonesian rupiah.