KUALA LUMPUR: The ringgit opened lower against the US dollar this morning as the greenback strengthened following the US Federal Open Market Committee (FOMC) minutes which showed that the Federal Reserve (Fed) is committed to raising interest rates after the pause in June, said an economist.
At 9 am, the local unit fell to 4.6630/6670 versus the US dollar compared with 4.6485/6555 at Wednesday’s close.
The US Dollar Index reportedly gained 0.31 per cent to 103.358 points.
Bank Muamalat Malaysia Bhd chief economist and social finance head Dr Mohd Afzanizam Abdul Rashid said the market is also awaiting Bank Negara Malaysia’s (BNM) decision on the overnight policy rate (OPR) and its latest assessment on the economy later today.
“BNM’s Monetary Policy Committee (MPC) will deliberate their decision on OPR today. As such, the ringgit should linger around 4.65 (to the US dollar),” he told Bernama.
The two-day MPC meeting kicked off yesterday, and according to an analyst, the central bank is expected to maintain the OPR at 3.0 per cent.
Meanwhile, the ringgit was traded lower against a basket of major currencies.
It declined vis-a-vis the euro to 5.0584/0628 from 5.0641/0717 at Wednesday’s close, slipped against the Japanese yen to 3.2330/2360 from 3.2221/2272 and weakened against the British pound to 5.9201/9252 from 5.9101/9190 at the close yesterday.
The local note also traded lower against other Asean currencies except against the Thai baht as it rose to 13.3183/3362 from 13.3237/3510 yesterday.
The ringgit was down versus the Singapore dollar at 3.4454/4486 from 3.4380/4437 on Wednesday’s close, fell against the Indonesian rupiah to 310.4/310.9 from 309.4/310.1 and decreased against the Philippine peso to 8.40/8.42 from 8.39/8.41 at the close yesterday.
Us dollar ticks up
The US dollar strengthened on Wednesday after the Federal Reserve signalled determination to raise interest rates after the pause in June, reported Xinhua.
The dollar index, which measures the greenback against six major peers, was up 0.32 per cent to 103.3727 in late trading.
According to minutes for June’s meeting of the Federal Open Market Committee issued on Wednesday, almost all participants noted in their economic projections that they judged “additional increases in the target federal funds rate during 2023 would be appropriate”.
Fed members also upgraded their rate hike forecast, estimating a terminal rate or peak rate of 5.6 per cent at the midpoint in 2023, up from a prior forecast of 5.1 per cent seen in March, suggesting two more hikes ahead.
The benchmark US 10-year Treasury rose by more than 8 basis points to 3.941 per cent at one point, while the yield on the 2-year Treasury was at 4.945 per cent, closer to a 52-week high of 5.084 per cent, after release of the minutes.
Moreover, the fall across global equity markets on Wednesday also drove up demand for the US dollar.
In late New York trading, the euro was down to US$1.0853 from US$1.0887 in the previous session, and the British pound fell to US$1.2694 from US$1.2719 in the previous session.
The US dollar bought 144.6680 Japanese yen, higher than 144.4930 Japanese yen of the previous session. The US dollar was up to 0.8989 Swiss francs from 0.8968 Swiss francs, and it was up to 1.3280 Canadian dollars from 1.3224 Canadian dollars. The US dollar rose to 10.9464 Swedish Krona from 10.8142 Swedish Krona.
Short-term rates to remain stable
Short-term rates are expected to remain stable today on Bank Negara Malaysia’s (BNM) operations to absorb surplus liquidity from the financial system.
Liquidity is estimated at RM41.80 billion in the conventional system and RM18.22 billion in Islamic funds.
Today, the central bank will call for two reverse repo tenders, namely a RM1 billion tender for 32 days and a RM500 million tender for 92 days.
BNM also announced the availability of reverse repo, sale and buy-back agreements as well as Collateralised Commodity Murabahah facilities for tenors of one to three months.
At 4 pm, BNM will conduct up to RM43.3 billion conventional overnight tender and RM18.2 billion Murabahah overnight tender.
Foreign exchange rates
Following are the opening Malaysian foreign exchange for major currencies today:
- 1 USD ————– 4.6630/6670
- 100 yen ———– 3.2330/2360
- 1 pound ———- 5.9201/9252
- 1 euro ———— 5.0584/0628
- 1 SGD ————— 3.4454/4486
- 100 baht ———- 13.3183/3362
- 1 mln rupiah —- 310.4/310.9
- 100 pesos ——– 8.40/8.41
Malayan Banking Bhd exchange rates for today:
| SELLING TT/OD | BUYING TT | BUYING OD | |
| 1 US Dollar | 4.7270 | 4.5930 | 4.5750 |
| 1 Australian Dollar | 3.1640 | 3.0400 | 3.0370 |
| 1 Brunei Dollar | 3.4930 | 3.3920 | 3.3880 |
| 1 Canadian Dollar | 3.5550 | 3.4610 | 3.4590 |
| 1 Euro | 5.1410 | 4.9750 | 4.9620 |
| 1 New Zealand Dollar | 2.9350 | 2.8270 | 2.8150 |
| 1 Papua N Guinea Kina | N/A | N/A | N/A |
| 1 Singapore Dollar | 3.4930 | 3.3920 | 3.3880 |
| 1 Sterling Pound | 6.0140 | 5.8270 | 5.8000 |
| 1 Swiss Franc | 5.2470 | 5.1280 | 5.1130 |
| 100 UAE Dirham | 130.2900 | 123.5600 | 123.1100 |
| 100 Bangladesh Taka | 4.4350 | 4.1620 | 3.9570 |
| 100 Chinese Renminbi | 65.7100 | 62.9400 | N/A |
| 100 Danish Krone | 70.7400 | 65.1100 | 65.0000 |
| 100 Hongkong Dollar | 61.1200 | 58.0900 | 57.7100 |
| 100 Indian Rupee | 5.8400 | 5.4800 | 5.3000 |
| 100 Indonesian Rupiah | 0.0326 | 0.0295 | 0.0244 |
| 100 Japanese Yen | 3.2790 | 3.1760 | 3.1610 |
| 100 New Taiwan Dollar | N/A | N/A | N/A |
| 100 Norwegian Krone | 45.4700 | 41.8100 | 41.6700 |
| 100 Pakistan Rupee | 1.7400 | 1.6300 | 1.4300 |
| 100 Philippine Peso | 8.6400 | 8.1400 | 7.9700 |
| 100 Qatar Riyal | 131.2400 | 124.5900 | 124.1500 |
| 100 Saudi Riyal | 127.5100 | 121.0500 | 120.6300 |
| 100 South Africa Rand | 26.0800 | 23.5600 | 23.3600 |
| 100 Sri Lanka Rupee | 1.5900 | 1.4500 | 1.2500 |
| 100 Swedish Krona | 44.5400 | 40.5700 | 40.7900 |
| 100 Thai Baht | 14.1300 | 12.5400 | 12.1400 |
Gold up
The physical price of gold as at 9.30 am stood at RM278.31 per gramme, down 52 sen from RM278.83 at 5 pm yesterday. – BERNAMA
