Latest news with #BankMuamalatMalaysia
The Sun
2 days ago
- Business
- The Sun
Ringgit strengthens against US dollar amid trade tensions
KUALA LUMPUR: The ringgit opened stronger against the US dollar on Monday, recovering from two straight sessions of decline. Market analysts attributed the rebound to lingering concerns over US trade policies and their global economic impact. At 8 am, the local currency rose to 4.2365/2515 against the greenback from Friday's close of 4.2420/2480. An analyst highlighted US President Donald Trump's proposed tariffs on semiconductors and pharmaceuticals as a key concern. 'These measures could disrupt international trade and dampen risk sentiment,' the analyst said. Investors are also monitoring tensions within the BRICS bloc and the fragile US-China trade truce. 'Trump's unpredictable policy moves continue to fuel market volatility,' the analyst added. Bank Muamalat Malaysia's chief economist, Dr Mohd Afzanizam Abdul Rashid, expects the ringgit to trade between 4.24 and 4.25 against the dollar. Mixed signals from US Federal Reserve officials have supported the greenback, with the dollar index at 98.243 points. 'The ringgit's movement remains cautious ahead of the US CPI data release on Tuesday,' he said. July's inflation is forecast to rise to 2.8 per cent, while core inflation may hit 3.0 per cent. Malaysia's second-quarter GDP data, due this Friday, will also be a key focus. Advance estimates suggest 4.5 per cent growth, but slower industrial and services output may pose downside risks. The ringgit strengthened against major currencies at the opening. It rose against the yen to 2.8693/8796 from 2.8720/8763 on Friday. The local note also gained versus the euro at 4.9343/9517 and the pound at 5.6951/7153. Against regional peers, the ringgit climbed against the Singapore dollar, Thai baht, Indonesian rupiah, and Philippine peso. - Bernama
Malay Mail
5 days ago
- Business
- Malay Mail
Ringgit slips against US dollar on profit-taking, Fed policy uncertainty
KUALA LUMPUR, Aug 8 — The ringgit continued its retreat against the US dollar on profit-taking after recent gains to close lower on Friday. At 6pm, the local note eased to 4.2420/2480 against the greenback from Thursday's close of 4.2340/2385. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said mixed signals from the US Federal Reserve (Fed) have also affected market sentiment, amid growing expectations for an interest rate cut. He noted that Fed officials remained divided on the timing and necessity for such a move. 'Some believe inflation could remain persistent, justifying the need to maintain a restrictive monetary policy. Others, however, feel that a rate cut should happen sooner to stabilise growth momentum,' he told Bernama. Mohd Afzanizam also pointed out that the upcoming release of the US Consumer Price Index (CPI) data for July, scheduled for next Tuesday, is likely to intensify the debate among Fed members over the direction of interest rates. 'The consensus estimates have pegged the inflation rate at 2.8 per cent, which is higher than 2.7 per cent in the prior month. As such, we will continue to see debate among Fed members on the direction of interest rates,' he said. At the close, the ringgit ended mostly higher against major currencies. It edged up against the yen to 2.8720/8763 from 2.8732/8765 at the close on Thursday, and improved against the euro to 4.9381/9451 from 4.9411/9463. However, it dropped versus the British pound to 5.7034/7114 from 5.6596/6656. The ringgit trended lower against regional peers. It dropped against the Singapore dollar to 3.3014/3064 from 3.2973/3013, declined against the Thai baht to 13.1173/1419 from 13.0954/1146, and was lower against the Indonesian rupiah at 260.3/260.8 from 259.9/260.3 previously. It slipped against the Philippine peso to 7.43/7.44 from 7.42/7.44. — Bernama
The Star
08-07-2025
- Business
- The Star
US clouds Malaysia rate path with surprise threat of 25% tariff
The surprise US decision to raise its threatened tariff on Malaysia to 25% means trade will almost certainly dominate the Southeast Asian nation's interest rate decision on Wednesday. Analysts were split on the rate outlook before the US raised its proposed tariff from 24% in a letter Monday, with 12 of 23 economists surveyed by Bloomberg having expected Bank Negara Malaysia to reduce the Overnight Policy Rate by a quarter point to 2.75%. The rest predicted no change. "The downside risk has become more elevated and this necessitates direct intervention from the policymakers, especially the central bank,' Mohd Afzanizam Abdul Rashid, an analyst at Bank Muamalat Malaysia, said Tuesday. "There could be 25 basis points cut in tomorrow's meeting and at the same time we are not ruling out the possibility of another round of 25 basis points cut on the horizon.' ALSO READ: The OPR dilemma Malaysia, which last adjusted borrowing costs in May 2023 with a 25 basis point hike, is Southeast Asia's last holdout against interest rate cuts, and the divided economist views reflected uncertainty over the trade outlook. Negotiators had been rushing to reach a deal with the US, with Malaysia seeking a below 10% rate on sectors critical to both economies. US President Donald Trump on Monday unveiled the first in a wave of promised letters to key trading partners, though he is still open to additional talks and pushed off the increased duties until at least Aug. 1. Malaysia's benchmark stock index fell as much as 0.7% on Tuesday, while the ringgit underperformed most of its Asian peers, even as it was little changed in late morning trade. Officials have signaled they will keep seeking a deal. "Malaysia is committed to continuing engagement with the US towards a balanced, mutually beneficial, and comprehensive trade agreement,' the Ministry of Investment, Trade and Industry said Tuesday. ALSO READ: Local banks positioning for potential OPR cut Policymakers had already given dovish signs. At the central bank's early May meeting, it dropped previously used language that its policy stance "remains supportive of the economy.' It also cut the statutory reserve requirement for banks to 1% from 2%, releasing roughly 19 billion ringgit ($4.5 billion) into the banking system. Similar reductions in March 2020 and November 2019 were both followed by rate cuts, though BNM said in May that the SRR is used to manage liquidity and isn't a signal of its monetary policy stance. Here's what to watch out for in Wednesday's statement: Growth Risks The central bank may unveil its fresh growth forecast for 2025 after officials said they would revise downward the 4.5% to 5.5% projection on tariff risks. The economy has slowed for three straight quarters. Exports contracted by 1.1% in May amid trade uncertainty, while private consumption - a key driver of growth - could be dented moving forward after the government broadened its sales and service tax effective July 1. The government is also set to reduce subsidies for the country's most popular and cheapest gasoline. ALSO READ: RHB IB expects Bank Negara to maintain OPR at 3% Another complication is that Trump has also threatened an additional 10% tariff on any country aligning themselves with BRICS, with which Malaysia is a partner. Prime Minister Anwar Ibrahim was in Brazil over the weekend to attend the BRICS summit. Another risk is the Trump administration's plans to restrict shipments of AI chips from the likes of Nvidia Corp. to Malaysia and Thailand, part of an effort to crack down on suspected semiconductor smuggling into China. Inflation Outlook Inflation has remained persistently low in Malaysia, prompting the central bank to say it will come in below 3% this year - the government's initial forecast was for price pressures to average 2% to 3.5%. The plan to reduce some gasoline subsidies in the second half of the year will likely have a contained impact on price pressures given that it's set to apply only on foreigners and the country's wealthiest. ALSO READ: Bank Negara signals readiness to cut OPR Ringgit Performance BNM may reiterate that the ringgit's performance is primarily driven by external factors. The currency has advanced 5.5% this year against the dollar, partly as firms repatriate overseas income on the encouragement of authorities. Still, the outlook for the currency - and economy - remains heavily dependent on any trade agreement with the US. - Bloomberg
