KUALA LUMPUR: The ringgit strengthened against the US dollar to end the week higher, on positive sentiment brought about by a better-than-expected third-quarter (Q3) Gross Domestic Product (GDP) performance, a dealer said.
At 6pm, the local currency stood at 4.1220/1260 versus the greenback compared with Thursday’s close of 4.1280/1330.
Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the ringgit against the US dollar (USD/MYR) pair was traded in a tight range today paring its earlier losses to end slightly higher.
He noted Malaysia’s Q3 GDP was better-than-expected, falling 2.7% as opposed to 4.6% contraction as suggested by the consensus estimates.
“Judging from Bank Negara Malaysia’s GDP announcement, the central bank seemed to be comfortable that the economic recovery would progress well into next year, although there could be speed bumps along the way.
“The policy support from the fiscal and monetary authorities should be able to facilitate the recovery process in 2021 as the global economy is likely to turn around next year,” he told Bernama.
He viewed that to some degree, the latest statistical releases indicated that the monetary policy accommodation was also appropriately well placed, implying downside risks to the Overnight Policy Rate (OPR) is minimal.
This meant that the OPR could stay unchanged at 1.75% in 2021 which should help the ringgit in the medium term as advanced economies were expected to maintain their zero interest rates policy and quantitative easing measures in 2021 and beyond, he said.
As such, the USD/MYR was poised to perform favourably going forward, he added.
Against other major currencies, the ringgit was traded mixed at the close today.
It rose against the Singapore dollar to 3.0558/0608 from Thursday’s close of 3.0603/0647 and increased against the British pound to 5.4291/4360 from 5.4411/4498 yesterday.
The local note weakened vis-a-vis the yen to 3.9246/9288 today from 3.9161/9220 yesterday and declined against the euro to 4.8743/8802 from 4.8739/8815. — Bernama