Ringgit opens almost flat against greenback

KUALA LUMPUR: The ringgit opened almost flat today after Bank Negara Malaysia’s (BNM) Monetary Policy Committee slashed the overnight policy rate (OPR) to 2.75% from 3% as a pre-emptive measure to secure improving growth trajectory amid price stability.

At 9am, the ringgit was quoted at 4.0650/0680 compared with yesterday’s close of 4.0650/0700.

AmBank Research said yesterday’s rate cut beat the 40% probability that BNM will “likely” stay behind the curve in the January policy meeting.

“We reiterate our view cited in the report dated Jan 20 where a rate cut is positive as it will help support the economy and capital market as well as help put a lid on the declining business and consumer sentiments,” it said in a note today.

Moving ahead, room for further rate cuts remains if the domestic and/or external environment continues to play up and raise the downside risk on the economy and capital market.

“Inflation is likely to average around 1.8% to 2% from a low base 0.7% for 2019, mostly coming from the cost side and lesser from the demand side,” it said.

Overall, the ringgit also traded mixed against other major currencies.

It was slightly lower against the Singapore dollar at 3.0129/0175 from 3.0122/0156 on Wednesday and declined against the Japanese yen to 3.7076/7132 from 3.6965/6995.

The local currency, however, rose against the euro to 4.5056/5128 from 4.5077/5126 and slipped against the British pound to 5.3406/3492 from 5.3085/3140 yesterday.