The ringgit surged by 2.3% on Monday, marking its largest gain since October 2015, driven by optimism about Malaysia’s economy and expectations of foreign capital inflows.
The currency outperformed its developing market peers, including the Chinese yuan, after a prolonged period of decline. This boost comes as the Malaysian government focuses on attracting foreign investments and scaling back subsidies to reduce the budget deficit.
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Malaysian currency up
Analysts suggest the ringgit’s recent performance is partly due to the anticipated Federal Reserve interest rate cuts, starting next month, which have eased pressure on the currency. On Monday, the ringgit strengthened to 4.3945 per dollar, its strongest level since April 2023, before easing slightly.
Efforts by Malaysian policymakers to encourage repatriation of overseas income and a recovery in global technology exports have helped stabilize the ringgit, which fell to a 26-year low in February. Analysts are hopeful that the currency’s undervaluation could be unwinding, with future external events and structural reforms potentially influencing its trajectory.
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