KUALA LUMPUR: The ringgit closed higher against the US dollar and regional currencies, due to easing crude oil concerns following the United Arab Emirates’ (UAE) exit from the Organization of the Petroleum Exporting Countries (OPEC) pact.

At the same time, sentiments remained cautious ahead of the United States Federal Reserve’s interest rate decision later today.

At 6 pm, the local note appreciated to 3.9495/9540 against the greenback from 3.9505/9550 at yesterday’s close.

Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said news of the UAE’s departure from the OPEC pact beginning May suggests the oil cartel may continue to lose its grip on sustaining higher crude oil prices, particularly once the current crisis subsides.

"As a result, West Texas Intermediate (WTI) and Brent crude prices were little changed today.

"This is a positive development as the cartel system should be discouraged to allow market forces to function more effectively and efficiently,” he told Bernama.

Mohd Afzanizam added that improved efficiency in the price discovery mechanism will send the right signals to industry players, potentially encouraging a shift towards renewable energy.