Ringgit strengthens against US dollar after FOMC meeting

KUALA LUMPUR: The ringgit began the day stronger against the US dollar following a recent meeting of the US Federal Open Market Committee (FOMC), which adopted a dovish stance on inflation. At 8 am, the ringgit was valued at 4.4200/4305 against the US dollar. This is an improvement from Wednesday's closing rate of 4.4330/4400. Dr. Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, noted that the FOMC chose to keep interest rates steady and significantly reduced the pace of its balance sheet reduction plan. During the press conference, Fed Chair Jerome Powell mentioned that inflation driven by tariffs is likely temporary. He also pointed out the risk of a recession, but described it as not alarming. This includes projections that suggest the Fed will lower its rates twice this year and may do so more in 2026 and 2027. Dr. Mohd Afzanizam highlighted that this FOMC decision has led to a boost in equities and a drop in US Treasury yields. He believes this is favorable for the ringgit since the Fed shows confidence in the US economy despite uncertainty surrounding local policies. The ringgit had mixed results against other major currencies. It rose against the euro but weakened against the British pound and Japanese yen. The local currency did perform better against ASEAN currencies, showing gains against the Singapore dollar and Thai baht. It also strengthened against the Indonesian rupiah and was slightly higher compared to the Philippine peso.