At 9.02am, the local note stood at 4.3820/3860 versus the greenback compared with Tuesday’s close of 4.3800/3850.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said market players would react to the latest assessment of the economy by BNM’s Monetary Policy Committee (MPC), especially on the overnight policy rate (OPR).

“We’ll see what would be their assessment of the economy and more importantly, whether this meeting results in an interest rate hike.”

“We believe BNM would maintain the existing OPR level, which is currently at 1.75%, the lowest in history since the benchmark rate was introduced in April 2004,” he continued.

While the demand for greater OPR is growing, Afzanizam expects BNM may just want to keep it steady as inflationary pressures are still within their tolerance level.

“In that sense, the US dollar-ringgit would remain stable at around the RM4.38 level,” he said.

He stated that this is due to the fact that the focus tonight is on the US Consumer Price Index (CPI) for April 2022, with the consensus on CPI inflation being 8.1% based on forecasts, down from 8.5% the previous month.

“It remains elevated, thus the US Federal Reserve (Fed) will continue hawkish. In short, the US dollar will continue to strengthen in the near future,” he added.

Meanwhile, the ringgit was traded mostly higher against a basket of major currencies.

The local note rose versus the Japanese yen to 3.3612/3645 from Tuesday’s close of 3.3643/3684 yesterday, appreciated slightly against the Singapore dollar to 3.1496/1529 from 3.1499/1540, and perked against the euro to 4.6147/6189 from 4.6156/6209.

However, it declined vis-a-vis the British pound to 5.3973/4022 from 5.3909/3971.