Ringgit To Continue Facing Volatility Amid Global Trade Concerns

KUALA LUMPUR, April 12, 2025 — The Malaysian ringgit weakened slightly to 4.4320 per US dollar this week, after hitting a two-month low of 4.500, reflecting cautious market sentiment.

Analysts attribute the dip to escalating US-China trade tensions, with China’s 125% tariffs on US goods raising fears of economic slowdown impacting Malaysia’s trade-reliant economy.

Volatility

Despite this, some experts remain optimistic, citing Malaysia’s robust growth outlook and potential Federal Reserve rate cuts that could ease pressure on the ringgit.

Bank Negara Malaysia stands ready to curb excessive volatility, buoyed by strong domestic fundamentals.

Impact on Exports

Escalating US-China trade tensions, marked by China’s 125% tariffs on US goods and US tariffs hitting 145% on Chinese imports, are poised to disrupt Malaysia’s export-driven economy. The US, absorbing 13.2% of Malaysia’s exports, and China, a key trading partner, drive demand for Malaysia’s electronics and electrical (E&E) products, which account for 40.4% of exports.

A 24% US tariff on Malaysian goods could raise prices, dampening demand, particularly for E&E, furniture, and rubber products. Trade diversion offers opportunities, but global slowdown risks and supply chain shifts threaten Malaysia’s RM1.508 trillion export market

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