The ringgit opened higher against the US dollar supported by Moody’s recent positive rating on the Malaysian government’s credit rating.
At 10.20am, the ringgit strengthened to 4.3730, up 0.05% against the USD from its closing of 4.3750 at the end of Friday.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the rating reflected the credit rating agency’s confidence in the Malaysian government’s commitment to restoring fiscal health.
He added that Moody’s had affirmed Malaysia’s sovereign credit rating at ‘A3’ with a stable outlook.
The agency recognised the government’s efforts to reduce the fiscal deficit which is projected to decline from 4.3% of gross domestic product (GDP) in 2024 to 3.8% of GDP this year.
Support for the ringgit should be evident in the medium to long term as the currency remains undervalued.
Meanwhile, Mohd Afzanizam said investors remained cautious ahead of the US Federal Open Market Committee (FOMC) meeting this week where policymakers' actions will provide guidance on the direction of economic policy.
Mohd Afzanizam predicted the ringgit is likely to trade in a tight range between RM4.37 to RM4.38 in the near term.
The ringgit was mostly traded higher against major currencies.
It rose against the Japanese yen to 2.8066/8119 from 2.8115/8149 on Friday and appreciated against the euro to 4.5747/5831 from 4.5911/5964. However, it weakened against the British pound to 5.4454/4554 from 5.4373/4435.
Against Asean currencies, the ringgit was also mostly traded higher.
It strengthened against the Thai baht to 12.9696/13.0037 from 13.0015/0241 Friday, rose against the Singapore dollar to 3.2411/2476 from 3.2482/2522 and rose against the Philippine peso to 7.49/7.51 from 7.50/7.51.
The local currency was, however, little changed against the Indonesian rupiah at 270.2/270.8 from 270.5/270.9 on Friday.
