Kuala Lumpur: The ringgit is expected to maintain a cautious stance in the coming week as investors closely observe forthcoming monetary policy decisions in Malaysia and the United States, an economist has stated.
According to BERNAMA News Agency, Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, indicated that the Federal Open Market Committee (FOMC) and the Bank Negara Malaysia (BNM) Monetary Policy Committee (MPC) meetings, set for next week, will be pivotal in evaluating market sentiment amidst prevailing uncertainties.
Dr. Mohd Afzanizam noted that the United States Federal Reserve may consider easing its policy rate owing to the impact of tariff-related uncertainties on business and consumer sentiments. Consequently, the ringgit is expected to remain cautious as traders and investors contemplate potential policy responses from monetary authorities in the coming week.
In addition, Kenanga Investment Bank Bhd anticipates that the ringgit will trade within the 4.30-4.35 range against the US dollar next week. The bank highlighted that markets are likely to remain cautious due to ongoing global economic uncertainty and changing tariff dynamics. It emphasized that trade negotiations, especially between the US and China, will serve as a crucial factor influencing the US dollar. Domestically, while BNM is expected to maintain its stance, any downward revisions to Malaysia’s growth forecast could garner significant attention.
The investment bank also pointed out that favorable outcomes from the special parliamentary sitting on May 5 might provide additional support to the local currency.
The ringgit concluded the week stronger against the US dollar, closing at 4.2560/2600, improving from 4.3705/3770 the previous week. The currency also gained strength against a basket of major currencies, including the euro, Japanese yen, and British pound. Additionally, the ringgit traded higher against ASEAN currencies, advancing against the Indonesian rupiah, Singapore dollar, Thai baht, and the Philippine peso.