Ringgit to continue one-year high at close

RINGGIT

THE ringgit ended at a new one-year high against the US dollar yesterday due to a strong demand for the currency from foreign and local institutions, said dealers.

At 5pm, the ringgit stood at 3.3900/3940 against the US dollar from Wednesday's close of 3.4150/4200.

Dealers attributed the uptrend on plans to allow the local unit to be traded abroad.

Bank Negara Malaysia governor Tan Sri Dr Zeti Akhtar Aziz was quoted as saying that Malaysia planned to allow the ringgit to be traded overseas once the foreign exchange and financial markets were more developed.

Zeti also expected the ringgit to continue to appreciate, adding that "if Malaysia's fundamentals continue to remain good, then obviously the currency would become stronger."

Meanwhile, the ringgit was mostly higher against other major currencies.

The local currency appreciated against the Singapore dollar to 2.4325/4389 from 2.4374/4421 Wednesday and it increased against the Japanese yen to 3.8409/8476 from 3.8704/8747 previously.

Against the British pound, the ringgit depreciated to 5.4376/4457 from 5.4301/4366 on Wednesday but it rose against the euro to 5.0067/0140 from 5.0261/0323 previously.

INTERBANK RATES

SHORT-TERM rates remained steady yesterday as Bank Negara Malaysia continued to intervene to offset the liquidity surplus in the financial system, dealers said.

As a result, the liquidity surplus was reduced to RM16.51 billion in the conventional system and RM7.72 billion in Islamic funds.

Bank Negara earlier estimated a surplus of RM24.60 billion in conventional operations and RM8.59 billion in the Islamic system.

To reduce the surplus, the central bank carried out a late conventional tender for RM16.50 billion of one-day money and an Al-Wadiah tender for RM7.7 billion of one-day money.

The overnight rate was quoted at 1.92 per cent while the one-week, two-week and three-week rates were pegged at 1.95, 1.97 and 1.99 per cent respectively.

KLIBOR

THE three-month Kuala Lumpur Interbank Offered Rate (KLIBOR) futures contracts on Bursa Malaysia Derivatives ended flat yesterday with two contract months traded, a dealer said.

December 2009 and June 2010 stood at 97.83 and 97.41 respectively with a total of 30 lots traded.

On the cash market, the underlying three-month KLIBOR remained at 2.15 per cent. The five-year Malaysian Government Securities futures were also untraded, with December 2009, March 2010, June 2010 and September 2010 at 109.90, 108.93, 107.97 and 107.05, respectively. - Bernama