Ringgit hits new year's high

RINGGIT

THE ringgit ended firmer against the US dollar yesterday, rising to a new high of 3.3715 for this year on positive sentiment following buying support from fund managers on the local bourse, dealers said.

At the close, the local currency appreciated against the US dollar to 3.3715/3745 from Tuesday's closing of 3.3900/3930.

The ringgit reached as high as 3.3690 during the trading session.

The local bourse and the ringgit gained as investors diversified their portfolios by buying more high-yield currency and assets as well as reducing their save-haven greenback, both in regional and global markets.

In New York overnight, the US dollar fell to a 14-month low against a basket of major currencies.

Investors there remained on the sidelines in anticipation of the outcome of the US Federal Reserve meeting yesterday with the possibility of an interest rate hike.

The Malaysian Institute of Economic Research said yesterday that the ringgit was expected to strengthen against the US dollar to around 3.30 next year.

According to the institute, the ringgit is still undervalued with more room to grow in the medium term by 2012 and possibly touching 3.00 per US dollar.

At the close of yesterday's trading, the ringgit was mostly lower against other major currencies.

It appreciated against the Singapore dollar to 2.4207/4251 from Tuesday's close of 2.4231/4282 but declined against the Japanese yen to 3.7810/7856 from 3.7662/7713 previously.

The ringgit weakened against the British pound to 5.3917/3979 from 5.3246/3322 on Tuesday and also against the euro to 5.0225/0280 from 5.0092/0158 previously.

INTERBANK RATES

SHORT-TERM rates remained stable yesterday as Bank Negara Malaysia continued to intervene in the market to mop up excess liquidity in the market, dealers said.

At the close, the liquidity surplus was reduced to RM13.41 billion in the conventional system and RM6.94 billion in Islamic funds.

Bank Negara had earlier estimated a surplus of RM18.34 billion in conventional operations and RM9.10 billion in the Islamic system.

It had earlier conducted two conventional, a repo, three Al-Wadiah as well as a Commodity Murabahah Programme tenders.

Bank Negara also called for a late conventional tender for RM13.4 billion of one-day money and an Al-Wadiah tender for RM6.9 billion of one-day money.

The overnight rate was quoted at 1.92 per cent while the one-, two- and three-week rates were pegged at 1.95, 1.97 and two per cent respectively.

KLIBOR

THE three-month Kuala Lumpur Inter-Bank Offered Rate (KLIBOR) futures contracts on Bursa Malaysia Derivatives were mostly lower at close yesterday with three outright transactions, a dealer said.

The futures market saw December 2009 rise one tick to 97.83 while September 2010 was down by three ticks to 97.20 and March 2011 lost ten ticks to 96.70.

Total volume rose to 30 lots from the 25 lots on Tuesday while open interests rose to 33,210 contracts from 33,200 contracts previously. At the 11am fixing yesterday, the underlying three-month KLIBOR remained flat at 2.15 per cent. As for the five-year Malaysian Government Securities, no trading was recorded throughout the day. - Bernama