The Malaysian ringgit has climbed to its strongest level in 13 months, marking a significant milestone for the nation’s economy and signaling continued investor confidence in Malaysia’s growth story. On Friday, the currency rose as much as 0.3% to 4.1720 — its highest level since October 2024 — driven by optimism about the nation’s growth outlook and diminishing expectations of a central bank rate cut.
With a remarkable 7% rally so far this year, the ringgit is positioned to outperform its Asian counterparts for a second consecutive year. “The ringgit now remains on course to top Asia for the second year running,” said Stephen Chiu, Chief Asia Foreign-Exchange and Rates Strategist at Bloomberg Intelligence in Hong Kong. Chiu attributed the strong performance to Malaysia’s fiscal discipline, political stability, and improving trade momentum.
Notably, the ringgit’s strength extends beyond its gains against the US dollar. It has reached its highest level against the Singapore dollar since September 2022 and set new records against the Indonesian rupiah. Analysts believe this momentum reflects both Malaysia’s internal stability and external economic opportunities, particularly amid improving global trade sentiment.
The nation’s economy has shown resilience, recording its fastest quarterly growth in a year, supported by rising external demand. The recent tariff truce between China and the United States — Malaysia’s two largest trading partners — further enhances the country’s export prospects.
Unlike other Asian currencies that tend to fluctuate with global uncertainty, the ringgit has found what analysts call a “sweet spot” — maintaining stability even as global conditions shift. Chiu noted, “While Asia’s high-yield currencies face political risks and Northeast Asian currencies weaken with dollar strength, the ringgit remains resilient and steady throughout the year.”
The liquidity in Malaysia’s foreign-exchange market has also surged, with daily trading volumes hitting around $20 billion — more than 40% higher than the average between 2020 and 2024, according to Bank Negara Malaysia (BNM). This increased activity highlights investor engagement and confidence in Malaysia’s financial system.
In the broader regional context, the ringgit’s rise contrasts with the softer Singapore dollar, which has weakened following recent policy adjustments by the Monetary Authority of Singapore, and the Indonesian rupiah, which continues to face pressure from fiscal and bond market challenges.
Foreign investors have also played a key role in the ringgit’s resurgence, pouring in $1 billion in bond inflows in October following September’s $1.7 billion outflow. Bank Negara Malaysia’s steady monetary stance — keeping interest rates unchanged — further reassures markets of its prudent and balanced approach.
