Ringgit advances against greenback

RINGGIT

THE ringgit closed higher against the US dollar yesterday as the greenback softened in overseas markets on expectations that the Federal Reserve would hold interest rates near zero, well into next year, dealers said.

The ringgit closed at 3.3650/3700 against the US dollar from 3.3740/3760 on Monday.

The dealers also said the local currency would follow the trend on regional markets.

Meanwhile, a dealer said the local market is likely to watch closely the 2010 Budget announcement this Friday, as investors expect to see deficit-cutting measures.

The ringgit was also higher against the Singapore dollar at 2.4176/4246 from 2.4240/4303 on Monday and gained against the yen at 3.7244/7316 from 3.7245/7275 previously.

Against the British pound, the ringgit was lower at 5.5159/5248 from 5.4946/4995 on Monday and higher against the euro at 5.0340/0419 from 5.0377/0414 previously.

INTERBANK RATES

SHORT-TERM rates closed steady yesterday as Bank Negara Malaysia intervened in the money market to absorb surplus funds, dealers said. The overnight rate was quoted at 1.92 per cent while the one-week, two-week and three-week rates were at 1.96, 1.98 and 2.01 per cent respectively. The total liquidity surplus in the conventional system decreased to RM14.60 billion from the RM23.71 billion estimated earlier yesterday.

For Islamic funds, the total liquidity surplus was reduced to RM5.91 billion from an earlier estimate of RM5.99 billion.

The Central Bank had earlier conducted three conventional tenders, a Repo tender, four Al-Wadiah tenders as well as a Commodity Murabahah Programme tender.

Bank Negara also conducted a late conventional tender of RM14.60 billion for one-day and an Al-Wadiah tender of RM5.9 billion for one-day.

KLIBOR

THE three-month Kuala Lumpur Inter-Bank Offered Rate (KLIBOR) futures contracts on Bursa Malaysia Derivatives were dominated by strip trading yesterday, dealers said.

The futures market saw 16 strip trades of 130 lots each from March 2010 to September 2014 except for September 2012 and June 2013.

Total volume stood at 2658 lots, up from the 261 lots on Monay, while open interests declined to 33,383 from 33,604 contracts at yesterday's close.

At the 11am fixing yesterday, the underlying KLIBOR stood flat at 2.15 per cent.

As for the five-year Malaysian Government Securities, no trading was recorded throughout the day. - Bernama