KUALA LUMPUR: The ringgit has been on a uptrend against the US dollar today, moving to its highest close since Feb 2, 2023 at the close of trading today. 

At 6 pm, the local note rose to 4.2410/2460 versus the greenback from Tuesday's close of 4.2535/2645.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the market observers are anticipating a 50 basis point (bps) cut in the Fed Fund Rate (FFR) tonight.

"This effectively will narrow the gap between the FFR and the Overnight Policy Rate (OPR) which currently stood at 2.50 per cent (5.50 per cent minus 3.00 per cent).

"This would make ringgit-denominated assets look attractive from the foreign investors' point of view," he told Bernama.

Mohd Afzanizam also said the prevailing ringgit-US dollar rate is nearing the immediate support level of 4.2128.

"Hence, tonight's Fed announcement is extremely critical to determine the ringgit's prospects going forward," he said.

On a related development, he said the Bank of Indonesia (BI) has unexpectedly cut its benchmark interest rate by 25 bps to 6.00 per cent.

The strong Indonesian rupiah against the greenback along with the slower inflation rate has allowed the BI to lower its interest rate and it seems that it is prepared to do it again in order to support Indonesia's economic growth.

"On that note, it's different paths by BI and Bank Negara Malaysia (BNM)," Mohd Afzanizam added.

Meanwhile, the ringgit also traded higher against a basket of major currencies.

It strengthened against the British pound to 5.6091/6158 from Tuesday's close of 5.6240/6385, surged vis-a-vis the Japanese yen to 2.9940/9977 from 3.0244/0324 and appreciated versus the euro to 4.7236/7292 from 4.7375/7498 previously.

At the same time, the local note traded firmer against ASEAN currencies.

It rose against the Singapore dollar to 3.2792/2833 from 3.2891/2979 at Tuesday's close and gained against the Thai baht to 12.7472/7680 from 12.7725/8105 yesterday.

It ticked up against the Philippine peso to 7.61/7.62 from 7.64/7.66 and traded upwards versus the Indonesian rupiah to 276.5/277.0 from 277.3/278.2 on Tuesday.

- BERNAMA

TAGS: Ringgit, US dollar, Mohd Afzanizam Abdul Rashid, FFR, OPR, Rate cuts, Closing