Kuala lumpur: The ringgit reversed its gains in the morning to end lower against the greenback on Thursday as the US Federal Reserve (Fed) kept its benchmark interest rate steady overnight. The Fed funds rate was kept unchanged at 4.25-4.50 per cent. At 6 pm, the local note fell to 4.2650/2730 versus the US dollar from yesterday’s close of 4.2410/2455.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid indicated that the Fed’s decision to maintain its key interest rate suggests that the current monetary policy stance is deemed appropriate. He mentioned that this policy position reflects the Fed’s intention to manage tariff-induced inflation with a restrictive monetary approach.

Domestically, Dr Mohd Afzanizam highlighted the tabling of the 13th Malaysia Plan (13MP) by Prime Minister Datuk Seri Anwar Ibrahim in Parliament. The development expenditure allocation was increased to RM430 billion from RM400 billion for the next five-year period from 2026 to 2030. He suggested that this increase will stimulate domestic demand and investment activities, consequently boosting Malaysia’s GDP growth and positively impacting the ringgit in the mid to long term.

The 13MP is designed to foster sustainable growth through value creation across various sectors, involving RM611 billion in investments for the plan’s success. Of this, RM430 billion is designated for the government’s development allocation. The plan foresees RM120 billion in funding from government-linked companies (GLCs) and government-linked investment companies (GLICs), with an additional RM61 billion anticipated from the private sector through public-private partnerships.

Dr Mohd Afzanizam noted that more than half of the RM430 billion allocation, amounting to RM227 billion, will be directed towards the economic sector, which is considered the main pillar of the country’s growth.

Despite the ringgit’s decline against the US dollar, it closed higher against major currencies. It appreciated against the Japanese yen, British pound, and euro, and also gained against several regional peers such as the Philippine peso, Thai baht, and Singapore dollar. However, it experienced a slight decrease against the Indonesian rupiah.