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BNM’s decision to maintain OPR rate lifts ringgit higher

21 Jan 2021 / 19:46 H.

KUALA LUMPUR: The ringgit closed higher for the third consecutive day today, trading on a better vibe as the Overnight Policy Rate (OPR)-cut hopes were getting priced out of the curve after Bank Negara Malaysia kept the rate on hold this week.

At the close, the local note stood at 4.0280/ 0320 against the greenbank from 4.0430/0470 yesterday.

The central bank maintained its OPR at 1.75 per cent during its first Monetary Policy Committee meeting for this year.

Axi chief global market strategist Stephen Innes said the central bank’s decision augurs well for the ringgit, especially with the market monitoring closely the performance of the US dollar.

“The Asian region has been watching US politics closely during presidential inauguration week for signs of a recentering of its relationship with the new Joe Biden’s administration. The US-China trade balances, central bank reserves and foreign exchange intervention are critical to this overview,” he said.

He added that the Flash US purchasing managers index due on Friday should further indicate a widening gap in service-sector activity, especially where the US is nudging ahead

“And the potential for higher US fiscal spending could prove to be a boost for the dollar in the near term on the back of higher real yields,” he added.

The ringgit strengthened against other major currencies.

It rebounded against the Singapore dollar to 3.0441/0481 from 3.0490/0530 at Wednesday’s close, rose vis-a-vis the pound to 5.5312/5380 from 5.5349/5412, and improved to 3.8944/8987 against the yen from 3.8950/8996 at yesterday’s closing.

The local note was also stronger against the euro at 4.8904/8965 versus 4.9025/9082 yesterday. -Bernama

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