Malaysia’s ringgit remained resilient in July despite a weaker US dollar, though analysts expect near-term pressure from market volatility, geopolitical uncertainty and persistent expectations of US rate hikes.
Ringgit Remains Broadly Stable
Malaysia’s ringgit remained broadly stable against the US dollar in July, despite the greenback losing ground against major global currencies during the month.
The US Dollar Index (DXY), which measures the dollar’s performance against a basket of major currencies, fell 1.3% month-on-month to 99.91 at the end of July from 101.19 at the end of June.
During the month, the index traded within a wider range of 99.91 to 101.53, while averaging 100.95, slightly higher than June’s average of 100.32.Despite the softer dollar, the ringgit weakened only marginally by 0.05% month-on-month to close July at RM4.086 against the US dollar, compared with RM4.084 at the end of June.
Throughout the month, the local currency traded within a relatively narrow range of RM4.07 to RM4.096, remaining above the RM4.00 level.Analysts continue to project the ringgit to average around RM4.01 in 2026, with the currency potentially ending the year near RM4.03. The outlook is supported by expectations of stronger capital inflows into emerging markets, including Malaysia, during the second half of the year.
However, the near-term outlook remains cautious. Rising geopolitical uncertainties, heightened volatility in global financial markets and persistent expectations that the US Federal Reserve may keep interest rates elevated are likely to support the US dollar.
These factors could limit the ringgit’s appreciation and keep the local currency under pressure over the coming months despite longer-term optimism.
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