Ringgit Hits Nine-Month High on Bond Inflows, Weak Dollar

The Malaysian ringgit strengthened to around 3.97 per dollar, hitting its highest level since June 2018, driven by optimism over the country’s role in the artificial intelligence supply chain and a solid growth outlook. Malaysia’s economic momentum is expected to remain firm this year, supported by resilient domestic demand and robust tourism prospects. Rising tech exports and the rapid expansion of the data-center sector are also attracting fresh foreign investment, reinforcing the country’s medium-term prospects. Meanwhile, expectations that Bank Negara Malaysia will keep rates unchanged for an extended period, alongside anticipated Federal Reserve easing, may narrow the US–Malaysia rate gap and further support the ringgit’s outperformance against regional peers. The currency has already exceeded analysts’ first-quarter projections, making it Asia’s top-performing currency so far in January.

The Malaysian ringgit firmed toward 4.13 per dollar on Thursday, marking its eighth straight session of gains amid strong economic momentum and improving investor sentiment. Malaysia’s economy grew 5.2% yoy in Q3 2025, accelerating from 4.4% in Q2 and posting its fastest growth in a year, according to flash data. Optimism was further lifted by easing tension between the US and China, as both are Malaysia’s top export markets, and renewed foreign appetite for local assets. Meantime, Bank Negara’s decision to hold rates steady last week signaled confidence in the economy despite the impact of rising U.S. tariffs. Foreign investors have snapped up nearly MYR 16.52 billion in Malaysian bonds year-to-date, Bloomberg News said, supporting the currency’s stability, which is now Asia’s top performer with an 8% gain. Meanwhile, the US dollar index held around 99.5 after President Trump signed a short-term funding bill, officially ending the longest government shutdown in American history.

Malaysia’s ringgit strengthened to its highest level since October 2024 on Tuesday, hovering around 4.188 per dollar, supported by strong foreign bond inflows and broad weakness in the U.S. currency. The rally comes as easing global trade tensions improve investor sentiment toward export-oriented economies like Malaysia. According to Bank Negara Malaysia, foreign investors poured $2.9 billion into Malaysian bonds in May—the largest monthly inflow since October 2013—amid rising confidence in the country’s fiscal and monetary outlook. Expectations that the Federal Reserve may begin cutting rates later this year also weighed on the dollar, further supporting the ringgit. On fresh data, Malaysia’s manufacturing PMI contracted for the 21st straight month in June but at the softest pace since February, as declines in output, new orders, and external demand all moderated, suggesting tentative signs of stabilization in the industrial sector.