Ringgit Likely To Trade Within Narrow Range Next Week Ahead Of BNM OPR Decision

By Siti Noor Afera Abu

KUALA LUMPUR, Jan 17 (Bernama) -- The ringgit is likely to trade within a narrow range against the US dollar next week as investors take a cautious stance ahead of Bank Negara Malaysia’s Monetary Policy Committee (MPC) meeting on Jan 22.

Bank Muamalat Malaysia Bhd’s chief economist, Dr Mohd Afzanizam Abdul Rashid, said traders will be watching the BNM’s MPC meeting next week and believe the central bank is likely to maintain the overnight policy rate (OPR) unchanged at 2.75 per cent as the growth trajectory has been commendable, while the inflation rate remains low.

“On that note, the ringgit would oscillate between RM4.05 and RM4.06 against the US dollar next week,” he told Bernama.

Meanwhile, Kenanga Investment Bank Bhd expects the ringgit to trade within the 4.05-4.08 range, noting that continued pressure on the US Federal Reserve (Fed) strengthens the case for a gradual de-dollarisation trend.

The investment bank said concerns over the Fed’s independence could weigh on the American dollar, although the Dollar Index may find stability in the coming weeks, supported by seasonal factors and resilient US economic data.

“Also, if the investigation on Fed chairman Jerome Powell is dropped, the US dollar could rebound,” it said in a note.

The ringgit ended the week slightly lower against the US dollar, but strengthened on a week-on-week basis to close at 4.0555/0605 compared with 4.0700/0765 last Friday.

The ringgit traded higher against a basket of major currencies this week.

It strengthened against the Japanese yen to 2.5637/5670 from 2.5805/5848 a week earlier, appreciated versus the euro to 4.7076/7134 from 4.7383/7459 and appreciated vis-a-vis the British pound to 5.4332/4399 from 5.4579/4666 previously.

The ringgit also traded firmer against its ASEAN peers.

The local currency appreciated against the Indonesian rupiah to 240.1/240.5 from 241.9/242.4 a week ago, and inched up against the Philippine peso to 6.83/6.84 from 6.87/6.88 previously.

It rose against the Thai baht to 12.9115/9332 from 12.9474/9738 last week, and was higher against the Singapore dollar to 3.1479/1521 from 3.1629/1682.

-- BERNAMA