MYR (Malaysian Ringgit)

[winston]

Ringgit Bears Emerge as Traders Weigh a Rate Cut in Malaysia

Asia’s top performing currency last year is set for a bout of weakness as traders brace for a higher risk of an interest rate-cut amid trade tensions.

After being largely range-bound this year, the Malaysian ringgit may fall to 4.6 per dollar by end-June.

Slowing global trade as well as Chinese and Malaysian growth due to Trump tariffs could force Bank Negara Malaysia to cut rates late in 2025.

Traders are fully pricing a 25 basis point reduction in Bank Negara Malaysia’s policy rate within 12 months, up from just a two-thirds chance at the beginning of the month.

Higher US tariffs on China, Malaysia’s biggest trade partner, would hurt an economy that has been showing resilience amid global tensions.

Any pressure on the yuan may weigh on the ringgit given their close correlation.

The local currency has also historically weakened in the second quarter.

Donald Trump’s planned tariffs on chip imports may also hurt exports for the Southeast Asian country. The US is Malaysia’s third-largest market for semiconductor exports.

However, pressure on the ringgit may ease amid growing bets for more interest-rate cuts from the Federal Reserve due to US recession fears.

Source: Bloomberg

https://www.livemint.com/market/stock-m ... 76749.html

[winston]

vested

Ringgit owes its surge to forces well beyond US dollar’s weakness

By Marcus Wong

Only about a quarter of the ringgit’s 12% surge over the past year — the biggest in Asia — is attributable to macro catalysts such as global risk sentiment and moves in the greenback.

Strengthening economic fundamentals — such as rising investment flows and growth that’s exceeded expectations — are proving to be more durable tailwinds for the currency, which has climbed to its strongest level since 2018.

The outsized gains “in the ringgit are likely on account of foreign direct investment, especially into data centres which has paid off nicely, the growth momentum and resumption of fiscal consolidation”.

Foreign investments across the services, manufacturing and primary sectors jumped by more than 47% year-on-year in the first nine months of 2025.

The nation’s bond market is among those most at risk should an increase in Japanese yields — beyond the one that rattled global markets last week — prompt Japanese investors to repatriate capital.

“Tech exports, foreign direct investment and stable Bank Negara Malaysia should underpin ringgit strength in 2026”.

Overseas investors have poured nearly US$308 million into the market on a net basis so far in January. That’s after an outflow of more than US$5 billion in 2025.

Source: Bloomberg

https://theedgemalaysia.com/node/791032