Ringgit strengthens against greenback

RINGGIT

THE ringgit was stronger against the US dollar at close yesterday after the government announced that it would form a US$2.5 billion joint venture company with Saudi Arabia, dealers said.

At close, the ringgit strengthened to 3.4600/4630 against the greenback from Tuesday's closing of 3.4810/4850.

"When there are foreign investors seeking to invest in Malaysia, the ringgit would be in demand. The good news of the joint venture has given a boost to the ringgit," a dealer said.

The joint-venture company will spearhead the flow of foreign direct investments from the Middle East as well as make strategic investments in high-impact projects in Malaysia.

"The ringgit also rode on the momentum of Bank Negara's prediction that the economy would return to growth by year-end, as stimulus packages revive domestic demand," the dealer stated.

Against the Singapore dollar, the local unit rose to 2.4527/4574 from Tuesday's 2.4554/4599 as well as against the Japanese yen to 3.8677/8714 from 3.8786/8852 previously.

The ringgit depreciated against the British pound to 5.5651/5716 from 5.5219/5303 on Tuesday but was higher against the euro at 5.0627/0674 from 5.0781/0857 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 fixed at 1.92 per cent while the one-week, two-week and three-week rates were at 1.95, 1.97 and 1.99 per cent respectively.

Total liquidity in the conventional system was reduced to RM21.05 billion from an earlier estimate of RM27.01 billion, while Islamic funds decreased to RM8.33 billion from an earlier estimate of RM12.440 billion.

Bank Negara conducted five conventional, two Al-Wadiah tenders and a repo tender yesterday.

The central bank also issued a late conventional tender for RM21 billion of one-day money and an Al-Wadiah tender for RM8.3 billion of one-day money.

KLIBOR

THE three-month Kuala Lumpur Interbank Offered Rate (KLIBOR) futures contracts on Bursa Malaysia Derivatives closed higher in thin trading yesterday with one contract month traded, dealers said.

March 2010 rose two ticks to settle at 97.65 with 10 lots traded.

On the cash market, the underlying three-month KLIBOR remained at 2.14 per cent.

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