Ringgit Expected To Remain Well Supported Next Week Ahead Of BNM OPR Decision
By Durratul Ain Ahmad Fuad
KUALA LUMPUR, Aug 29 (Bernama) -- The ringgit is expected to remain well supported next week ahead of Bank Negara Malaysia’s (BNM) Monetary Policy Committee meeting on Sept 3, with the central bank widely expected to keep the Overnight Policy Rate (OPR) at 2.75 per cent.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said he did not see any reason for BNM to change its policy stance at this juncture.
“The economy has been growing at a robust rate as reflected in the second quarter growth of six per cent.
“At the same time, inflation remains contained. Although it has been rising, the rate is still at a moderate level. In June 2026, inflation grew by 1.9 per cent (2Q 2026) compared with 1.6 per cent in the first quarter.
“In light of this, given that BNM is likely to keep the rate steady, it should provide a positive catalyst for the ringgit to remain well supported,” he told Bernama.
On the US interest rate outlook, Mohd Afzanizam said expectations of a rate hike had been hampered by weaker labour market conditions in July and recent developments involving the US Treasury’s intervention in the long-term bond market.
He said the US Treasury’s preference for lower long-term yields had raised concerns that higher interest rates could put further pressure on the US government’s finances.
“As a result, expectations of a US rate hike have declined significantly. The probability of a rate hike in September has fallen to around 30 per cent from more than 50 per cent previously,” he said.
Mohd Afzanizam expects the ringgit to trade range-bound between RM4.03 and RM4.04 next week, ahead of the US non-farm payrolls (NFP) and ISM data releases.
He said the two indicators would be key data points for market participants to watch.
“Based on consensus estimates, NFP is expected to record job creations totalling 45,000 in August versus a contraction of 23,000 jobs during July,” he said.
Meanwhile, Quintex Intel global strategist Stephen Innes expects the ringgit to trade within a relatively tight range early next week as markets turn their attention to the US NFP report due on Sept 4.
“The US NFP report has greater potential to move the US interest rate market and, by extension, the US dollar,” he said.
Kenanga Investment Bank Bhd (Kenanga IB) said US labour data would be in focus next week, with the Job Openings and Labour Turnover Survey expected at 7.30 million and payrolls at 60,000, following a contraction of 23,000 in July.
It said US Federal Reserve chair Kevin Warsh’s Jackson Hole speech would be the immediate catalyst, while payrolls would influence market expectations ahead of the Federal Open Market Committee (FOMC) meeting on Sept 15-16.
“Markets will also monitor US-Iran developments, particularly Tehran’s reported preparations to reopen the Strait of Hormuz, which would ease oil-supply risk,” it added.
Kenanga IB said BNM should keep OPR at 2.75 per cent, leaving the ringgit mainly driven by global interest rates and US dollar positioning.
“We expect the Fed to hold in September, with our first cut in the second quarter of 2027 against 34 per cent pricing for a September hike and December fully priced.
“A soft payrolls print favours a retest of 4.020, while strong payrolls or an unclear Warsh could push USD/MYR toward 4.050, with an early bounce possible from oversold conditions,” it said.
On a Friday-to-Friday basis, the ringgit rose against the greenback to 4.0230/0270 from 4.0365/0405 a week earlier.
The local currency traded higher against a basket of major currencies during the week.
The ringgit appreciated versus the British pound to 5.4632/4687 from 5.5118/5173 on Friday last week, strengthened against the Japanese yen to 2.5193/5219 from 2.5449/5476 a week earlier, and gained vis-a-vis the euro to 4.6828/6874 from 4.7227/7274 previously.
The ringgit traded higher against ASEAN currencies.
The local note improved versus the Philippine peso to 6.46/6.47 from 6.54/6.55 a week earlier, advanced against the Singapore dollar to 3.1652/1686 from 3.1809/1843 previously, increased vis-a-vis the Indonesian rupiah to 227.3/227.7 from 228.1/228.4, and gained against the Thai baht to 12.2087/2253 from 12.3474/3638 a week before.
-- BERNAMA