Ringgit Strengthens on BNM Rate Hold and Weaker US Dollar
The Malaysian ringgit gained strength against the US dollar at the opening of trading on Friday, following Bank Negara Malaysia's decision to keep interest rates steady. The local currency rose to 4.0370/0420 against the greenback from Thursday's close of 4.0405/0445.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid attributed the ringgit's performance to the 'sweet spot' economy, which suggests robust growth and fairly benign inflation dynamics. He noted that this flexibility provides support for the ringgit, making it an attractive currency to hold.
The decision by Bank Negara Malaysia to maintain the overnight policy rate at 2.75 per cent also contributed to the ringgit's strength. Additionally, US Federal Reserve Governor Christopher Waller's comments on keeping interest rates unchanged if inflation continues to ease towards the Fed's two per cent target put further pressure on the greenback.