Ringgit opens weaker as global central banks raise interest rates

KUALA LUMPUR – The ringgit took a dip against the US dollar at the opening today as traders anticipate global central banks’ moves on interest rate hikes, which appear to be far from over, an economist said.

At 9am, the local note slipped to 4.6035/6100 versus the greenback compared with yesterday’s closing of 4.5950/6000.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said that narratives for monetary tightening seem to be making a comeback after the Reserve Bank of Australia and the Bank of Canada (BOC) raised their respective policy rates this week.

“The BOC unexpectedly raised its target overnight rate by 25 basis points to 4.75% after keeping it steady since its March meeting,” he said. 

Meanwhile, Bursa Malaysia extended its downtrend this morning, taking its cue from Wall Street, which closed mixed overnight due to expectations that interest rates may remain elevated for quite a while.

At 9.10am, the FTSE Bursa Malaysia KLCI fell 2.18 points to 1,376.47 from 1,378.65 at yesterday’s close.

The key index opened 2.86 points lower at 1,375.79.

The broader market was negative, with decliners surpassing advancers 170 to 131, while 224 counters were unchanged, 1,718 untraded, and 21 others suspended.

Turnover was 247.88 million units, worth RM83.02 million. – Bernama, June 8, 2023