Kuala lumpur: The ringgit opened firmer against the US dollar on Friday, buoyed by improved sentiment after Bank Negara Malaysia (BNM) kept its overnight policy rate (OPR) unchanged at 2.75 percent. At 8 am, the local currency rose to 4.0370/0420 against the greenback from Thursday's close of 4.0405/0445.

According to BERNAMA News Agency, on Thursday, BNM's Monetary Policy Committee (MPC) decided to maintain the OPR at 2.75 percent. Bank Muamalat Malaysia Bhd chief economist Dr. Mohd Afzanizam Abdul Rashid suggested that the MPC's decision to keep the OPR steady amid robust growth and benign inflation dynamics indicated that the Malaysian economy was in a 'sweet spot'. He noted that this stability should provide support to the ringgit as BNM has policy flexibility, which can be an advantage for holding more ringgit.

Meanwhile, Mohd Afzanizam mentioned that the ringgit also benefited from a softer US dollar following US Federal Reserve (Fed) Governor Christopher Waller's remarks overnight. These remarks reduced expectations of a rate hike at the Fed's September meeting. Waller's comments indicated that he would support keeping interest rates unchanged if inflation continued to ease towards the Fed's two percent target, which put further pressure on the greenback.

Against a basket of major currencies, the ringgit weakened against the Japanese yen to 2.5936/5970 from 2.5838/5865 at Thursday's close, eased against the British pound to 5.4608/4676 from 5.4539/4593, and dipped against the euro to 4.6942/7000 from 4.6894/6940 previously.

The ringgit traded mostly lower against regional currencies. It declined against the Singapore dollar to 3.1868/1910 from 3.1850/1884 and fell against the Thai baht to 12.2668/2898 from 12.2421/2598 at Thursday's close. The ringgit was flat against the Philippine peso at 6.46/6.47 but gained against the Indonesian rupiah to 228.3/228.7 from 228.5/228.8 previously.