KUALA LUMPUR: The ringgit settled on a positive note today on the back of the overnight policy rate (OPR) cut announced by Bank Negara Malaysia (BNM), with the local financial stocks benefitting from it, said a dealer.
The central bank’s Monetary Policy Committee, in its third meeting for the year today, reduced the OPR overnight policy rate (OPR) by 50 basis points to 2.00%, the lowest OPR level in 10 years since February 2010.
At 6pm, the local unit rose to 4.3030/3100 versus the greenback from yesterday’s close of 4.3100/3190.
Financial services firm AxiCorp’s chief global market strategist Stephen Innes said the BNM’s rate cut decision came in as expected but should still be viewed as positive for risk sentiment as it provides a policy tailwind when businesses open after the movement control order (MCO) is lifted.
“But today positive shift had to do with a favourable price action on the benchmark Brent crude futures continued rally, supported by the reopening of major economies around the world.
“This has allowed investors to sidestep the US-China political imbroglio at least for today,“ he told Bernama.
At press time, Brent crude improved 7.65% to US$29.28 per barrel.
Another market analyst said the ringgit appreciated against the US dollar in tandem with most Asian currencies as lockdowns in some part of the world have been eased due to slower spread of Covid-19 which lifted risk sentiment and offset worries about the resumption of the US-China trade tensions.
Meanwhile, the ringgit closed higher against a basket of major currencies.
The local currency strengthened against the Singapore dollar to 3.0384/0440 from yesterday’s close of 3.0427/0501 and appreciated versus the Japanese yen to 4.0268/0337 from 4.0363/0467.
It improved vis-a-vis the euro to 4.6679/6772 from 4.7138/7254 and rose against the British pound to 5.3542/3642 from 5.3603/3733 previously. - Bernama
source https://www.thesundaily.my/business/ringgit-settles-higher-against-us-dollar-AY2375882
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