Ringgit Opens Mixed as Investors Assess BOJ Rate Hike Impact
The ringgit opened mixed against major and ASEAN currencies on Monday following the Bank of Japan's (BOJ) interest rate hike last Friday. The local note eased to 4.0810/0865 against the US dollar from last Friday's close of 4.0795/0840.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said that the BOJ's rate hike has raised concerns about unwinding the yen carry trade, while higher crude oil prices could mean elevated inflation.
He noted that this would provide the US Federal Reserve with a reason to continue raising interest rates by another 25 basis points later this year. Meanwhile, Mohd Afzanizam said that the Malaysian economy has performed well, with last year's growth at 5.2 per cent and in the first half of 2026, the gross domestic product recorded 5.7 per cent growth.
He believes that normalising the overnight policy rate back to 3.00 per cent is the right decision, as it would help build up Bank Negara Malaysia's policy buffer against potential headwinds in the future.