THE ringgit opened higher against the US dollar today, buoyed by the increase in the overnight policy rate (OPR) to 3%, but the two currencies are projected to trade in a narrow range as risk-off mode leads to increased demand for the greenback.

At 9am, the local note rose to 4.4350/4400 versus the US dollar from Wednesday’s closing rate of 4.4525/4580.

Bank Muamalat Malaysia Bhd chief economist and social finance head Mohd Afzanizam Abdul Rashid said risk-off mode seems to be taking hold in the markets, but the unexpected move by Bank Negara Malaysia’s (BNM) Monetary Policy Committee to increase the OPR lifted the ringgit.

“However, as we expect BNM to stop the OPR revision cycle, spillover from the OPR hike seems limited. On that note, the ringgit should stay guarded as market participants are weighing the possibility of a pause by the US Federal Reserve and a weakening global growth outlook,” he told Bernama. – Bernama, May 5, 2023.