The ringgit opened higher against the US dollar on Monday as expectations of a possible interest rate hike by Bank Negara Malaysia (BNM) boosted sentiment ahead of the central bank’s monetary policy meeting this Thursday.
At 8am, the local currency was quoted at RM4.0550/4.0635 against the greenback, compared with Friday’s closing rate of RM4.0555/4.0600, according to Bernama.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said BNM’s Monetary Policy Committee could consider raising the Overnight Policy Rate (OPR) by 25 basis points.
He said the pre-emptive rate cut in July 2025, which lowered the OPR from 3% to 2.75%, had served its purpose as concerns over slower economic growth following the tariff shock had not materialised.
Malaysia recorded gross domestic product (GDP) growth of 5.2% in 2025, while economic expansion accelerated to 5.5% during the first nine months of 2026.
Dr Mohd Afzanizam said the stronger economic performance provided a clearer case for OPR normalisation, which could offer further support to the ringgit.
However, market consensus remained that BNM would maintain the benchmark interest rate at 2.75%, highlighting uncertainty surrounding the central bank’s upcoming decision.
Externally, investors remained cautious ahead of the United States midterm elections on Tuesday, while continuing to monitor developments surrounding the conflict in West Asia.
Against other major currencies, the ringgit strengthened against the British pound, euro and Japanese yen.
The local currency rose to RM5.4276/5.4390 against the pound from RM5.4461/5.4522 at Friday’s close. It also strengthened against the euro, which eased to RM4.5238/4.5332 from RM4.5413/4.5464.
Against the Japanese yen, 100 yen was quoted at RM2.5715/2.5771, compared with RM2.5782/2.5812 previously.
Among regional currencies, the ringgit gained against the Singapore dollar and Thai baht, while remaining broadly unchanged against the Indonesian rupiah and Philippine peso.
It strengthened to RM3.1724/3.1793 against the Singapore dollar and RM12.0024/12.0400 for every 100 Thai baht. Meanwhile, 100 Indonesian rupiah stood at RM223.40/224.00, while 100 Philippine pesos were quoted at RM6.36/6.38.
