Ringgit hits highest since 2018 on AI, growth optimism in Malaysia
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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 0.8 per cent to 3.9750 per US dollar on Jan 26, the strongest since June 2018. Gama Asset Management sees the ringgit rising to 3.9 per US dollar this quarter.
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. 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.
Malaysia’s growth momentum is expected to continue in 2026, supported by resilient domestic demand and likely strong tourist arrivals. Rapid expansion of the data centre sector is also opening new opportunities and drawing in investments.
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. It has already surpassed analysts’ projections for the first 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 return of foreign investors to local assets is also supporting demand for the currency. Global funds bought US$256 million (S$324.7 million) of local stocks on a net basis in January through Jan 23, helping to lift the benchmark FTSE Bursa Malaysia KLCI Index to a seven-year high.
The central bank’s likely hold on interest rates through 2027, alongside expectations for continued Federal Reserve easing, may narrow the US rate advantage over Malaysia. Bank Negara Malaysia kept rates unchanged last week.
“AI and export demand is leading to strength in the Malaysian ringgit,” said Mr Jeff Ng, head of Asia macro strategy at Sumitomo in Singapore. “A neutral to even hawkish central bank may support the ringgit.” BLOOMBERG
