Ringgit Ends Lower Vs Greenback As BNM Lower GDP Projection

By Durratul Ain Ahmad Fuad

KUALA LUMPUR, July 28 (Bernama) -- The ringgit ended easier against the US dollar today, as traders' sentiment was affected by Bank Negara Malaysia’s (BNM) gross domestic product (GDP) revision for the year. 

At 6 pm, the local note slid to 4.2275/2345 versus the greenback from last Friday’s close of 4.2195/2245.

The central bank has revised Malaysia’s 2025 GDP growth to 4.0-4.8 per cent from 4.5-5.5 per cent previously, and similarly, the inflation rate for 2025 is projected to range between 1.5 per cent and 2.3 per cent from the previous forecast of 2.0-3.5 per cent.

Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the BNM is being pragmatic by adjusting the growth forecast lower, taking into account external risks.

At the same time, a lower inflation forecast suggests that the impact from the anticipated RON95 subsidies rationalisation is likely to be manageable.

“As such, we foresee this will be positive for the ringgit in the mid- to long-term as fiscal consolidation will continue to take place, resulting in more fiscal space which can be redirected into targeted assistance as well as higher development expenditure (DE).

“This Thursday, the government will announce the 13th Malaysia Plan, and we foresee a higher allocation for DE in the next five years to drive the Malaysian economy into high-income status,” he said to Bernama. 

Meanwhile, he noted that the US Dollar Index (DXY) has strengthened, buoyed by optimism over the upcoming US-China trade talks.

“The US Dollar Index (DXY) was up 0.5 per cent to 98.13 points as news over US tariffs is seen to be dollar-positive,” he said.

US and Chinese officials are set to meet in Sweden today, with both parties expected to extend the trade truce.

At the close, the ringgit ended higher against most major currencies.

It rose against the Japanese yen to 2.8497/8546 from 2.8529/8565 at the close last Friday, appreciated versus the British pound to 5.6720/6814 from 5.6786/6853 last week, and edged higher against the euro to 4.9331/9412 from 4.9507/9566 previously.

However, the ringgit was mixed against regional peers.

It was almost flat against the Indonesian rupiah at 258.3/258.9 from 258.5/258.9 last Friday, gained against the Singapore dollar to 3.2917/2974 from 3.2937/2978 last week, weakened versus the Thai baht to 13.0511/0787 from 13.0268/0478 and fell against the Philippine peso to 7.39/7.41 from 7.38/7.40 previously.

-- BERNAMA