Kuala lumpur: The ringgit closed lower against the US dollar on Thursday, with escalating tensions in the Middle East impacting market sentiment and strengthening the greenback. At 6 pm, the ringgit was recorded at 3.9415/9480 against the US dollar, down from 3.9395/9465 at Wednesday's close.

According to BERNAMA News Agency, Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, highlighted that the ongoing conflict involving the United States, Israel, and Iran has kept global tensions high on traders' radar, negatively affecting sentiment. Despite these tensions, Bank Negara Malaysia (BNM) decided to maintain the Overnight Policy Rate (OPR) at 2.75 percent, noting the geopolitical risks stemming from the Iran conflict.

Dr. Mohd Afzanizam explained that BNM's decision indicates an assessment of the situation, suggesting that the OPR will likely remain stable in the near term, which could be beneficial for the ringgit. Earlier statements from the central bank emphasized that the current OPR level is deemed appropriate and supports economic stability amid price stability concerns. BNM also communicated that the Monetary Policy Committee (MPC) will continue to monitor developments and evaluate the risks affecting domestic growth and inflation.

By the day's end, the ringgit showed a mixed performance against a basket of major currencies. It strengthened against the British pound to 5.2635/2722 from 5.2640/2733, but weakened against the euro to 4.5808/5884 from 4.5738/5819 and slipped against the Japanese yen to 2.5080/5124 from 2.5062/5108.

In ASEAN currency trading, the ringgit appreciated against the Thai baht to 12.4711/5016 from 12.5246/5541 but fell against the Singapore dollar to 3.0885/0938 from 3.0864/0921. It remained flat against the Indonesian rupiah at 233.1/233.6 and was unchanged against the Philippine peso at 6.72/6.74.