Kuala lumpur: 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.
According to BERNAMA News Agency, 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 stated that the BNM is being pragmatic by adjusting the growth forecast lower, taking into account external risks.
Furthermore, a lower inflation forecast suggests that the impact from the anticipated RON95 subsidies rationalisation is likely to be manageable. Dr Mohd Afzanizam expressed optimism, noting that this could be positive for the ringgit in the mid- to long-term as fiscal consolidation will continue, resulting in more fiscal space for targeted assistance and higher development expenditure (DE). He added that the government is set to announce the 13th Malaysia Plan this Thursday, which is expected to include a higher allocation for DE to drive the Malaysian economy towards high-income status.
Meanwhile, Dr Mohd Afzanizam observed that the US Dollar Index (DXY) has strengthened, buoyed by optimism over the upcoming US-China trade talks. The index increased by 0.5 per cent to 98.13 points as news of US tariffs is perceived to be dollar-positive. US and Chinese officials are scheduled to meet in Sweden today, with expectations of extending 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 showed mixed performance against regional peers, remaining almost flat against the Indonesian rupiah, gaining against the Singapore dollar, but weakening versus the Thai baht and Philippine peso.