KUALA LUMPUR (Reuters)

Narrowing interest rate differentials between Malaysia and major economies positively impact Malaysia's ringgit, despite increased global market volatility following the U.S. election, according to the central bank chief, Abdul Rasheed Ghaffour.

Ghaffour stated that Bank Negara Malaysia would take necessary actions to ensure a financially stable environment that fosters investment and economic activity. He emphasized, "The central bank will play its part and do what is needed to ensure both monetary and financial stability," during the launch of a new investment portal.

The central bank maintained its key policy rate at 3.00% in its final meeting of the year, reflecting a positive economic outlook and steady inflation but cautioned against potential currency volatility. Ghaffour expressed confidence in investment prospects due to Malaysia's strong economic fundamentals.

This past year, the country attracted significant digital investments from major tech firms, such as Alphabet's Google, leading to economic growth that surpassed market expectations and making the ringgit one of Asia's strongest currencies.

Additionally, Second Finance Minister Amir Hamzah Azizan announced that Malaysia would reveal a new investment incentives framework in the first quarter of 2025, which will include new strategic investment funds.