Ringgit lower against US$ on possible OPR cut

KUALA LUMPUR: The ringgit was slightly lower against the US dollar early Thursday due to weak market sentiment over a possible cut on the overnight policy rate (OPR) by Bank Negara Malaysia (BNM).

At 9 am (0100 gmt), the ringgit was quoted at 4.1350/1400 compared with 4.1320/1370 at Tuesday’s close as the market was closed on Wednesday in conjunction with Labour day.

Kenanga Research in its note today said that loan growth has retained its downward trend in March, registering a 10-month low expansion of 4.9 per cent year-on-year, compared with 5.0 per cent in February.

“We believe that BNM now has a bigger leeway to cut its OPR rate by 25 basis points, possibly at its next Monetary Policy Committee meeting on May 7,” it said.

The research house added that the decline in loan growth was mainly driven by a slowdown in loans extended for construction, working capital and personal use while loans for consumer durables and passenger cars continued to deteriorate.

“This indicates an elevated precautionary sentiment among consumers against a backdrop of slower economic growth,” it said.

Meanwhile, the ringgit was traded lower against other major currencies.

It fell against the Singapore dollar to 3.0389/0430 from 3.0362/0410 at Tuesday’s close and depreciated versus the British pound to 5.3991/4060 from 5.3662/3744.

The local currency, however, strengthened vis-a-vis to the yen to 3.7075/7123 from 3.7118/7170 but declined against the euro to 4.6333/6397 from 4.6311/6384. – Bernama

Source : TheStar