Ringgit Jumps To 34-month High Vs US Dollar After China Unveils Stimulus Measures

KUALA LUMPUR, The ringgit jumped against the US dollar at the close on Tuesday, reaching its highest level in 34 months after China unveiled a stimulus package aimed at revitalising its economy.

At 6 pm, the ringgit surged to 4.1550/1605 against the US dollar, up from Monday’s close of 4.2000/2060, marking a year-to-date gain of 10.49 per cent. This was the ringgit’s highest closing level since Nov 11, 2021, when it was at 4.1525/1545.

It also performed strongly against ASEAN and other major currencies.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that the People’s Bank of China (PBOC) has unveiled a multitude of monetary support measures, including banks’ reserve requirement and interest rate cuts, as well as measures to support the real estate market. ‘This has somewhat alleviated concerns over the beleaguered Chinese economy as China is seen struggling to achieve its five per cent growth target,’ he told Bernama.

Mohd Afzanizam also noted that Malaysia’s lower-than-e
xpected inflation rate, announced yesterday, suggests that Bank Negara Malaysia (BNM) is likely to maintain the overnight policy rate (OPR) at its current level for the remainder of 2024 and potentially into 2025. He said BNM is demonstrating prudence in its monetary policy approach, remaining vigilant against inflationary risks. ‘This cautious stance has contributed to improved confidence, as seen in the recent appreciation of the ringgit against the US dollar,’ he added.

The ringgit also performed strongly against a basket of major currencies.

It gained versus the euro to 4.6274/6335 from 4.6645/6712 on Monday, appreciated against the British pound to 5.5590/5663 from 5.5805/5885 and strengthened vis-a-vis the Japanese yen to 2.8796/8836 from 2.9238/9282.

It also traded higher against ASEAN currencies.

It advanced against the Singapore dollar to 3.2244/2289 from 3.2503/2552 at Monday’s close and bounced against the Philippine peso to 7.39/7.40 from 7.50/7.52. The Malaysian ringgit also improved versus t
he Indonesian rupiah to 273.5/274.0 from 276.1/276.7 and went up to 12.6426/6640 from 12.7203/7451 against the Thai baht.

Source: BERNAMA News Agency