Ringgit hits highest since 2018 on AI, growth optimism in Malaysia
Sign up now: Get ST's newsletters delivered to your inbox
Against the Singapore dollar, the ringgit was trading at 3.1276 at 9.35am, down 0.7 per cent from its close on Jan 23.
PHOTO: LIANHE ZAOBAO
KUALA LUMPUR – The Malaysian ringgit rose to the strongest level in more than seven years, buoyed by optimism over the country’s ties to the artificial intelligence supply chain and the nation’s growth outlook.
The currency appreciated as much as 1 per cent to 3.9678 per US dollar on Jan 26, the strongest since May 2018. Gama Asset Management sees the ringgit rising to 3.9 per US dollar this quarter.
Local assets are rallying alongside other emerging markets amid a sell-off in the greenback sparked by potential US involvement in Japanese foreign-exchange (FX) intervention.
Against the Singapore dollar, the ringgit was trading at 3.1275 at 4.50pm, down 0.7 per cent from its close on Jan 23. The ringgit has climbed about 0.7 per cent against the Singdollar to date in 2026, and gained 4.6 per cent in the last 12 months.
T. Rowe Price is most bullish over the ringgit within the emerging-Asia FX space, given that it is a “destination for data centres with ample energy resources and is doing well in terms of tourism”, said Mr Leonard Kwan, a fixed-income fund manager in Hong Kong.
The ringgit is Asia’s top performing currency so far in January, following two years of outperformance in the region. A strategist at OCBC sees the ringgit potentially strengthening toward the 3.9650 level, supported by gains in the renminbi and yen, while Gama Asset Management expects the currency to rise to 3.9 per US dollar this quarter.
Tech exports, foreign direct investment and Bank Negara Malaysia keeping rates unchanged in 2026 would help the ringgit outperform South-east Asian peers again in 2026, Goldman Sachs strategists wrote in a note on Jan 24. The central bank maintained its policy rate last week.
The return of foreign investors is also giving equities a boost. Global funds bought US$256 million (S$324.7 million) of local stocks on a net basis in January – the most among emerging regional peers — helping to lift the KLCI gauge to the highest since 2018.
“Steady fiscal trajectory and stable economic growth have positioned the country as an attractive destination for foreign investment, particularly in infrastructure, financial services and renewable energy,” said Mr Tareck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore. BLOOMBERG
