KUALA LUMPUR (May 23): The ringgit appreciated to its strongest level against the US dollar so far today at 4.2943 on crude oil price gains and as the US dollar weakened.
At 10:39am, the ringgit was traded at 4.2963 against the US dollar after trading between 4.2943 and 4.3030 so far today. Over the last one year, the exchange rate was between 3.9327 and 4.5002.
The US Dollar Index, which measures the value of the US dollar against a basket of currencies, fell to 96.869 at 10:31am.
The ringgit tracks crude oil prices as the commodity forms a crucial portion of the Malaysian economy.
Reuters reported that Brent and US crude oil futures rose three cents each to US$53.86 and US$51.16 a barrel respectively at 0019 GMT on the expectation that an OPEC-led production cut would be extended to next March.
Goldman Sachs was quoted as saying in a note that "oil prices are rebounding with stock draws and greater certainty on an extension of the production cuts."
"A nine-month extension would normalise OECD inventories by early 2018, in our view, but we see risks for a renewed surplus later next year if OPEC and Russia's production rises to their expanding capacity and shale grows at an unbridled rate," Goldman Sachs said.