The Malaysian ringgit strengthened for a fourth day as the government’s measured fuel subsidy adjustment and easing geopolitical tensions boosted market sentiment.
KUALA LUMPUR: The ringgit opened higher against the US dollar for a fourth consecutive session. The local currency strengthened to 3.9855/4.0050 from Thursday’s close of 3.9920/9955.
The move follows the government’s announcement of a pragmatic adjustment to its fuel subsidy programme. Prime Minister Datuk Seri Anwar Ibrahim said the individual monthly limit for BUDI95 purchases will be temporarily reduced to 200 litres from 300 litres, effective April 1.
He cited the ongoing conflict in West Asia as the reason for the adjustment. Anwar also noted that Iran has permitted Malaysian oil tankers to pass through the Strait of Hormuz.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said the policy reflects a balance between fiscal discipline and household impact. “This should be positive for the ringgit as the government is cognisant of the ripple effect from the war in Iran and provides a timely response,” he told Bernama.
Market analysts noted that most consumers will be unaffected by the quota change. The government stated that average monthly usage is about 100 litres, with nearly 90% of users consuming less than 200 litres.
Meanwhile, SPI Asset Management managing partner Stephen Innes pointed to a temporary easing in geopolitical tensions. He said a 10-day extension on potential US strikes against Iranian infrastructure had taken “some of the sharp edge off the greenback’s safe haven rally.”
The ringgit also traded higher against other major currencies. It rose against the Japanese yen to 2.4951/5077 from 2.5025/5049.
It strengthened versus the British pound to 5.3143/3403 from 5.3301/3348 and climbed against the euro to 4.5969/6194 from 4.6140/6180.
The local note appreciated against ASEAN currencies as well. It gained against the Singapore dollar to 3.0994/1148 from 3.1102/1132.
It rose versus the Thai baht to 12.0868/1566 from 12.1529/1695 and edged up against the Indonesian rupiah to 235.7/237.0 from 236.1/236.4. The ringgit also inched up against the Philippine peso to 6.61/6.65 from 6.62/6.63.