The embattled ringgit clawed back some lost ground against the Singdollar yesterday, but that did not stop people from beating a path to money changers to stock up on the Malaysian currency.
After hovering near its all-time low on foreign exchange markets, the ringgit inched back up to settle at 3.0154 to one Singdollar as of 8pm last night.
Money changers offered a bit less than that to customers shopping for the best deal. The best rate quoted at The Arcade in Raffles Place was as high as 2.985 ringgit to one Singdollar.
However, the ringgit's slight recovery yesterday - it was up 0.98 per cent against the greenback and 0.04 per cent to the Singdollar - will not last, analysts said.
"Sentiment is still very fickle," said ANZ senior forex strategist Khoon Goh. "Foreign selling has abated for now but I wouldn't say we've seen the end of it."
The ringgit was helped yesterday by gains in Malaysia's benchmark KLCI stock index, which rose 2 per cent as investors hunted for bargains after Monday's sharp sell-off.
Overnight weakness in the greenback also helped, as did a small rebound in oil prices - though the data still points to an oversupply in crude oil.
More impetus came in the evening with news that China was again cutting interest rates and lowering the amount of cash that banks have to set aside.
That lifted hopes for a rebound in emerging markets, currencies and commodities.
"This is what we think the market has been crying out for, together with allowing the currency to depreciate in a controlled manner," said Macquarie head of forex strategy Nizam Idris.
But he is hardly expecting a sustained rally in Asia. "A bit more than a 'dead cat bounce' is likely in the days ahead but not a resurrection," he said.
Besides, Asian currencies tend to strengthen towards the end of the month as exporters convert their US dollar receipts into earnings, said ANZ's Mr Goh.
"The ringgit is taking a bit of a breather now but the real test is next week, when we enter a new month," he said.
The Malaysian authorities have indicated that they will let the ringgit find its own level. Analysts expect Bank Negara to go the way of Bank Indonesia and let the currency slide gradually to preserve its dwindling foreign exchange reserves.