Ringgit Weakens in November Despite Fed Rate Cut: Recovery Expected?

In November 2024, the ringgit continued its depreciation trend despite a further rate cut by the U.S. Federal Reserve. The U.S. dollar strengthened significantly, with the Dollar Index (DXY) rising by 1.7% month-on-month to 105.74, its highest in five months. The ringgit fell by 1.5% month-on-month to close at RM4.446, reducing its year-to-date appreciation to 3.3%, down from 4.9% at the end of October.

Ringgit weakens

Additionally, the Trade-Weighted Ringgit Index (TWRI), which measures the ringgit’s performance against Malaysia’s key trading partner currencies, dropped by 0.7% month-on-month to 90.70, signaling weaker competitiveness.

Despite this, analysts anticipate a recovery for the ringgit by year-end, supported by narrowing interest rate differentials. The ringgit is projected to strengthen to RM4.30, buoyed by expectations of further easing by the U.S. Federal Reserve and a stabilization in global currency markets.

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Staff Writer

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