Ringgit to extend upward momentum next week

The ringgit is expected to extend upward momentum next week, riding on bullish sentiment on the local and regional markets, analysts said.

An analyst said that the Bank Negara Malaysia's move to maintain its Overnight Policy Rate (OPR) at 3.25 per cent is expected to further boost investors’ appetite for the local unit.

"The global oil price, which has extended its gains for the past two trading days, is also expected to benefit the ringgit next week, as well as the currencies of other emerging oil producing countries," he said.

The central bank also cuts the statutory reserve requirement (SRR) by 50 basis points to 3.50 per cent from four per cent, effective Feb 1, 2016.

BNM said the cut was to ensure sufficient liquidity in the domestic financial system and to support the orderly function of the domestic financial market.

On the global front, he said that rising speculation of monetary easing by other major central banks may hint more investors to shun safe-haven currencies.

For the week just ended, the ringgit rose to the 4.29 level against the US dollar on Friday, lifting the currency to a near three-week high.

On a weekly basis, the local unit appreciated further against the greenback to 4.2950/2040 from last Friday's 4.3965/3035.

It went up against the Singapore dollar to 3.0073/0157 from 3.0483/0544 last Friday and improved against the yen to 3.6309/6388 from 3.7458/7524 previously.

The ringgit was better against the euro to 4.6566/6673 from 4.7917/7011 and ended higher against the British pound to 6.1238/1384 from 6.3121/3230.