The ringgit opened mixed against major and ASEAN currencies on Monday as investors weighed the Bank of Japan’s (BOJ) latest interest rate hike and its potential impact on global monetary policy.
Against the US dollar, the ringgit slipped to 4.0810/0865 at 8am from Friday’s close of 4.0795/0840.
The BOJ raised its policy rate by 25 basis points to 1.25% on Friday, bringing borrowing costs to their highest level in 31 years. It was also the central bank’s first rate increase since June.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the move had fuelled concerns over the possible unwinding of the yen carry trade, while higher crude oil prices could keep inflation elevated.
He said persistent inflation could give the US Federal Reserve further reason to raise interest rates by another 25 basis points later this year.
“Higher crude oil prices could mean that inflation would remain elevated. This would provide the US Federal Reserve with a reason to continue raising interest rates by another 25 basis points later this year,” he told Bernama.
Despite the external pressures, Mohd Afzanizam said Malaysia’s economy remained resilient, with growth reaching 5.2% last year and gross domestic product expanding 5.7% in the first half of 2026.
He said this supported the decision to normalise the overnight policy rate back to 3.00%, while allowing Bank Negara Malaysia to build a policy buffer against potential future headwinds.
“Hence, the ringgit could be well supported and could stay in a narrow range today,” he said.
Against major currencies, the ringgit edged higher against the euro to 4.6846/6909 from 4.6849/6901 previously.
However, it weakened against the Japanese yen to 2.5990/6027 from 2.5829/5860 and slipped against the British pound to 5.4641/4714 from 5.4543/4603.
The ringgit also traded mixed against other ASEAN currencies.
It weakened against the Singapore dollar to 3.1980/2026 from 3.1933/1971 and slipped against the Indonesian rupiah to 229.8/230.2 from 229.7/230.0.
The local currency strengthened against the Thai baht to 12.2369/2585 from 12.2383/2562, while remaining unchanged against the Philippine peso at 6.50/6.51.
