Ringgit hits highest in 4 years on growth optimism
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Against the Singapore dollar, the ringgit gained 0.3 per cent to 3.1709 per Singdollar as at 1.18pm.
PHOTO: ST FILE
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KUALA LUMPUR – The Malaysian ringgit reached the strongest level against the US dollar in more than four years, reflecting optimism on its economy and linkages to the global tech cycle.
The ringgit rose 0.3 per cent versus the greenback to 4.0938 on Dec 12, the highest since May 2021. With a gain of over 9 per cent against the US dollar to date in 2025, it is Asia’s best-performing currency in 2025.
Against the Singapore dollar, the ringgit also gained 0.3 per cent overnight to 3.1709 per Singdollar as at 1.18pm. Year to date, the ringgit has strengthened 3.1 per cent against the Singapore currency.
“Strong fundamentals of the ringgit place it in a leading position to outperform regional peers,” Maybank strategists including Saktiandi Supaat wrote in a note. Catalysts for the ringgit include a continuation of the investment upcycle, fiscal reforms in Malaysia and the nation’s emergence as a key data centre hub, they added.
Fuelling the Malaysian currency’s popularity is an export-driven economy that has benefitted from a rebound in global demand, helping third-quarter growth to beat expectations.
Policymakers are also optimistic that data centres can help harness new growth opportunities for the country. Meanwhile, factory output in October accelerated at the fastest pace since September 2022, data released on Dec 12 show.
Investor mood has also brightened following a thaw in US-China trade relations – Malaysia’s two largest export markets.
The optimism has prompted foreign investors to expand their exposure to Malaysian assets. Global funds poured US$1.5 billion (S$1.9 billion) into the country’s bonds in November, the largest inflows in six months.
The local central bank is expected to keep interest rates unchanged through 2026, according to a Bloomberg survey of economists, which will likely lend additional support for the currency.
There’s scope for the ringgit’s outperformance in emerging Asia to extend into 2026, buoyed by the nation’s links to the tech supply chain and strong foreign direct investment, Goldman Sachs Group strategists including Danny Suwanapruti wrote in a note on Dec 9. BLOOMBERG
