KUALA LUMPUR: The ringgit jumped to a fresh 14-month high against the greenback yesterday, hitting 4.120 at the close as the continued anticipation of an interest rate cut by the US Federal Reserve (Fed) next week weighed on the dollar.
At 6pm, the ringgit advanced to 4.1200/1235 versus the greenback compared to Tuesday’s close of 4.1275/1330.
The local currency beat the previous high recorded on Sept 30, 2024, when it closed at 4.1210 against the greenback.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the expectation of an interest rate cut by the Fed next week has clearly resulted in a stronger ringgit as the decision will narrow the gap in the rate differential between the Fed funds rate and Malaysia’s overnight policy rate.
“Based on the interest rate futures contract, the probability of an (US) interest rate cut next week has gone up to more than 90% at the moment,” he told Bernama.
At the close, the ringgit trended lower against major currencies. However, it traded mostly higher against Asean currencies.
