Malaysia’s ringgit strengthened further on Friday, rising to its highest level in more than a year against the US dollar and reaching a three-year high against the Singapore dollar.
The ringgit gained 0.3% to 4.1720 per USD, its strongest level since October 2024.
The currency has appreciated more than 7% this year, positioning it as the best-performing currency in Asia.
Analysts say the rise is supported by fading expectations of a rate cut by Bank Negara Malaysia (BNM), renewed optimism over economic growth and improving external demand.
On track to lead regional currencies
Bloomberg Intelligence chief Asia FX and rates strategist Stephen Chiu said the ringgit is on track to lead regional currencies for a second consecutive year.
He added that fiscal discipline and political stability have strengthened investor confidence.
The ringgit also climbed against regional currencies.
It advanced to its strongest level against the Singapore dollar since September 2022, and hit a record high against the Indonesian rupiah.
Improving demands from major trading partners
Malaysia’s economy recorded its fastest quarterly growth in a year, supported by improving demand from major trading partners.
Tensions between China and the United States also eased after both countries agreed to extend their tariff truce last week.
Foreign exchange market liquidity has improved significantly. BNM data showed average daily onshore FX trading volume rising to about USD 20 billion this year, more than 40% above the 2020 to 2024 average.
Nanyang Siang Pau also reported that foreign investors recorded net bond inflows of USD 1 billion in October, reversing a USD 1.7 billion outflow in September.
BNM maintained the Overnight Policy Rate at 2.75%, and swaps market pricing indicates that interest rates are likely to remain unchanged over the next 12 months.
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