THE ringgit closed higher yesterday against most major currencies, including the US dollar, on expectation that Bank Negara Malaysia may increase its overnight policy rates (OPR), a forex dealer said.
At 5pm, the ringgit stood at 3.3835/3865 against the US dollar compared with 3.3855/3880 on Monday.
Bank Negara is scheduled to release its monetary policy statement tomorrow.
"There is still some uncertainties on the outcome. So the push for the ringgit has not been that high. The ringgit could move as high as 3.37 against the greenback if the interest rates hike is imminent," said the dealer.
Economists generally expect the Central Bank to increase the OPR in the second-half or middle of the year.
However, some expect the bank to raise the OPR by 25 basis points this week from an all-time low of 2 per cent.
The local currency was also higher against other major currencies, except the yen.
It strengthened against the Singapore dollar to 2.4046/5091 from 2.4091/4133 yesterday and rose against the British pound to 5.0424/0486 from 5.1284/1336 previously.
Similarly, the ringgit was higher against the euro at 4.5630/5677 from 5.6138/6182 but eased against the yen to 3.7978/8029 from 3.7903/7941 on Monday.
SHORT-TERM rates ended steady yesterday as Bank Negara Malaysia continued to intervene in the money market to absorb excess liquidity.
The overnight, one-week and two-week rates remained unchanged at 2 per cent, 2.03 per cent and 2.04 per cent respectively.
Bank Negara yesterday morning carried out five conventional tenders comprising RM8 billion of three-day money, and RM1 billion each of one-week, 10-day, 13-day and three-week monies.
The central bank also called for a repo tender to borrow RM1 billion for 29-day money.
In addition, it issued Al-Wadiah tenders for RM1 billion of one-week money, RM500 million of two-week money and another RM500 million of 28-day money.
As a result, the excess in the conventional system was reduced to RM27.9 billion from RM54.1 billion estimated earlier while the surplus in the Islamic system declined to RM12.3 billion from RM14.01 billion estimated earlier.
In late trading, Bank Negara also called for tenders to borrow RM20 billion of one-day money from the conventional operations and RM12 billion of one-day money from Islamic funds.
THE three-month Kuala Lumpur Interbank Offered Rate futures on Bursa Malaysia Derivatives closed mixed yesterday, dealers said.
June 2010 slipped one tick to 97.40, while Dec 2010 and March 2011 added four ticks and five ticks to 97.05 and 96.90 respectively.
Volume amounted to 82 lots, down from 200 lots on Monday while opening interest remained unchanged at 39,303 contracts.
The five-year Malaysian Government Securities futures were untraded. - Bernama