Malay Mail - Ringgit ends higher against greenback despite US interest rate hike

Muristek

Ringgit ends higher against greenback despite US interest rate hike

Link [2022-03-17 15:14:01]

A money changer counts US dollar notes in Kuala Lumpur October 29, 2021. — Picture by Shafwan Zaidon

KUALA LUMPUR, March 17 — The ringgit extended its gains to end higher against the US dollar today despite the interest rate hike by the US Federal Reserve, with the rising oil price providing support, an analyst said.

At 6pm, the local currency stood at 4.1945/1980 versus the greenback from 4.1965/1995 on yesterday’s close.

Bank Islam Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the rate hike decision by the US Fed seems to not have a severe impact on the ringgit with the local currency trading steadily today.

The US Federal Open Market Committee (US FOMC) yesterday decided to raise the Fed fund rate by 25 basis points, bringing the benchmark interest rate to 0.50 per cent.

“This (rise of the ringgit) has happened despite the fact that the US Fed is likely to raise their benchmark to around 1.75 per cent to 2.00 per cent by the end of the year,” he told Bernama. “Perhaps the elevated levels of Brent crude and crude palm oil prices may have supported the value of the ringgit while the further reopening of the economy beginning April should accelerate Malaysia’s economic recovery from the second quarter onwards.”

At press time, the benchmark Brent crude oil price rose 4.69 per cent to US$102.60 per barrel.

However, the ringgit traded mostly lower against a basket of major currencies, except versus the Japanese yen, where it rose to 3.5364/5396 from 3.5461/5487 at yesterday’s close.

The local unit weakened against the Singapore dollar to 3.0931/0959 from 3.0823/0847, declined against the British pound at 5.5212/5258 from 5.4790/4829, and was lower against the euro at 4.6311/6350 from 4.6111/6144 yesterday. — Bernama