KUALA LUMPUR: Bank Negara Malaysia (BNM) today cautioned that the outcome of the US elections could heighten the ringgit's volatility in the near term.
Donald Trump claimed victory over the US Presidential election on Wednesday, as results put him on the verge of beating Democrat-candidate Kamala Harris. He has not been widely declared as the winner yet.
It said in its monetary policy statement today, the ringgit's performance continues to be primarily driven by external factors.
"Looking ahead, the narrowing interest rate differentials between Malaysia and the advanced economies is positive for the ringgit."
"Malaysia's favourable economic prospects and domestic structural reforms, complemented by ongoing initiatives to encourage flows, will continue to provide enduring support to the ringgit," the central bank added.
The ringgit was trading at 4.398 against the US dollar at 12nn today.
The ringgit is down almost three per cent against the US dollar, in the last month.
BNM said the Monetary Policy Committee (MPC) remains vigilant to ongoing developments to inform the assessment on the domestic inflation and growth trajectories going into 2025.
"The MPC will ensure that the monetary policy stance remains conducive to sustainable economic growth amid price stability," it added.