Ringgit lower in early trade ahead of OPR announcement

Ringgit lower in early trade ahead of OPR announcement
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KUALA LUMPUR (Sept 9): The ringgit retreated against the stronger US dollar this morning ahead of Bank Negara Malaysia’s (BNM) decision on the overnight policy rate (OPR) today.

At 9.05am, the local note stood at 4.1525/1550 against the greenback from 4.1495/1530 recorded at yesterday’s closing.

The central bank’s Monetary Policy Committee will convene to decide on the OPR today, which will provide clues about the current economic situation and the recovery outlook for Malaysia, an analyst said.

Earlier on, OCBC Bank said that the slashing of Malaysia’s 2021 gross domestic product (GDP) growth outlook might be a prelude to a potential cut in the OPR.

Last month, BNM governor Datuk Nor Shamsiah Mohd Yunus said Malaysia's projected economic growth for 2021 was revised to between 3% and 4%, lower than the earlier projection of between 6% and 7%.

She attributed the lower growth projection to the reimposition of the nationwide Covid-19 containment measures following a spike in the local infection rate.

Meanwhile, the US dollar’s safe-haven stature helped the greenback to hold on to its gains despite emerging signs that the US economic growth is being hampered by a resurgence in coronavirus cases as well as other challenges.

The US Federal Reserve's (Fed) latest survey of the nation's business conditions showed that the country’s economic activities “downshifted” in July and August, following rising concerns over Covid-19 cases, supply chain problems and labour shortages.

Back home, the ringgit was traded lower against a basket of major currencies.

The local note stood unchanged versus the Singapore dollar at 3.0828/0849 from 3.0828/0857 yesterday but declined vis-a-vis the euro to 4.9058/9087 from 4.9026/9068 previously.

It also depreciated against the Japanese yen to 3.7681/7708 from 3.7632/7672 and dropped against the British pound to 5.7147/7181 from 5.7082/7129 yesterday.