The ringgit opened higher and is getting closer to reaching a five-year high against the US dollar after the Monetary Policy Committee (MPC) of Bank Negara Malaysia (BNM) maintained the Overnight Policy Rate (OPR) at 2.75%.
At 10:26 am, the ringgit opened at 4.0180, up 0.50% against the US dollar since opening on Friday in the Asian session.
Bank Muamalat Bhd Chief Economist, Dr Mohd Afzanizam Abdul Rashid explained that the MPC's decision reinforces the stability of the OPR policy, thus supporting the strengthening of the local currency.
He also stated that market sentiment is seen improving after United States (US) President Donald Trump softened his stance on Greenland.
At the same time, US Personal Consumption Expenditure (PCE) Inflation data recorded an increase of 2.8% in December as expected, compared to 2.7% in the previous session.
The development reinforced expectations that the Federal Reserve (Fed) will keep interest rates on hold next week.
At the open, the ringgit was mixed against other major currencies.
It rose against the Japanese yen to 2.5416/5516 from 2.5440/5469, rose against the euro to 4.7347/7529 from 4.7205/7257 and gained against the British pound to 5.4381/4590 from 5.4273/4334.
The ringgit was also mixed against ASEAN currencies.
It strengthened against the Philippine peso to 6.81/6.84 from 6.82/6.83 and was little changed against the Indonesian rupiah at 238.4/239.4 from 238.9/239.3.
It also declined against the Singapore dollar to 3.1458/1581 from 3.1441/1478 and fell against the Thai baht to 12.9592/13.0187 from 12.8587/8792.
