The ringgit has been trading in a fairly narrow band this week, expected to move between RM4.06 and RM4.09 against the US dollar as markets wait on cues from across the Pacific rather than anything happening domestically. Several Federal Reserve officials are due to speak in the coming days, and analysts say their tone on further rate hikes will likely set the pace for regional currencies, the ringgit included.
Bank Negara Malaysia has kept its Overnight Policy Rate steady, a decision economists have described as evidence the domestic economy is sitting in something of a sweet spot: solid growth, inflation that hasn't run away, and enough policy flexibility to respond if conditions shift.
The bigger date on everyone's mind, though, is October 9, when Budget 2027 gets tabled. Investors are particularly keen to see how the government plans to fund ongoing fuel subsidy commitments without pushing past Malaysia's self-imposed debt ceiling of 65 percent of GDP. A clear, credible funding plan could go a long way toward easing the foreign fund outflows that have weighed on the ringgit against neighbours like Singapore in recent weeks. Until then, expect the currency to keep drifting sideways.
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