The Ringgit surged today to test the critical RM4 psychological barrier, marking its strongest performance in nearly eight years.
The local currency reached an intraday high of 4.003 in afternoon trade, a level not sustained since the first half of 2018.
While the Ringgit famously strengthened to the 3.86 level in April 2018, it spent the subsequent years (2019–2025) largely trading between 4.10 and 4.80.
Today’s rally represents a significant return to the “4.00 handle,” fueled by a combination of domestic policy stability and cooling global trade tensions.
Key performance drivers
- OPR stability: The rally follows Bank Negara Malaysia’s decision on Jan 22 to hold the Overnight Policy Rate (OPR) at 2.75%. This stability has made the Ringgit a preferred “carry trade” currency in the region.
- Record reserves: BNM’s international reserves were recently confirmed at USD 125.6 billion, providing the highest level of capital cover seen in years.
- US Dollar weakens: The “Greenback” retreated globally after President Trump de-escalated tariff threats against European nations regarding the Greenland dispute, easing the pressure on emerging market currencies.
Historical perspective
Since breaking above 4.00 in late 2015, the Ringgit has only twice mounted serious challenges to return to the 3.00-range:
- Early 2018: Touched a multi-year high of 3.86.
- Early 2021: Briefly touched 4.01 before retreating.
Analysts suggest that if the current momentum holds and the Ringgit breaks cleanly below 4.00, the next technical support level could be the 3.95 mark seen during the 2018 rally.
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