KUALA LUMPUR (June 16): The ringgit strengthened against the US dollar after the US Federal Reserve maintained the nation's interest rate at 0.5% amid concerns that the UK may leave the European Union (EU).

At 10.44am, the ringgit appreciated to 4.0890 versus the US dollar. The exchange rate so far today was between 4.0823 and 4.0963 as investors evaluated the impact of the UK's potential EU exit, which is popularly known as Brexit, and the US's economic growth.

Reuters reported that Federal Reserve Chair Janet Yellen left US interest rates, which is also known as the fed funds rate (FFR), unchanged on Wednesday, citing slow jobs gains, tepid growth and low inflation — and an impending vote in Britain on whether to quit the EU.

"I think it's fair to say that it was one of the factors that factored into today's decisions," Yellen said of the "Brexit" vote next week. "Obviously how that turns out is something that will factor into future decisions."

In Malaysia today, MIDF Amanah Investment Bank Bhd wrote in a note that the US Federal Reserve's decision to keep the FFR unchanged at 0.5% in the June Federal Open Market Committee meeting was in line with MIDF's expectation and forecast by economists surveyed by Bloomberg.

MIDF said the research firm maintained its view that Bank Negara might cut the overnight policy rate (OPR) by 25 basis points (bps) this September while expecting the US Federal Reserve to increase its FFR by 25 bps in the same month.

Malaysia's current OPR is at 3.25%. MIDF said: "External economic condition continues to be against our favour with all of the economics and political issues remain uncertain."

"We opine that there is a need for our domestic monetary policy to stimulate the economy in order to support and accommodate the domestic economy. The risks of prolonged slowdown in the economy are possible given latest developments in both internal and external fronts," MIDF said.