The Malaysian ringgit surged to its highest level against the US dollar in six months, driven by growing expectations of an interest rate cut in the United States as inflation stabilizes.
According to The Edge Market, in early trade this morning, the ringgit climbed to 4.6630, marking its highest value since the beginning of the year.
Top performer in Asia
This performance outshone other regional currencies, including the Chinese yuan and Indonesian rupiah.
The Australia and New Zealand Banking Group (ANZ) commented on the development, highlighting its positive implications for Malaysia’s trade balance.
“Firstly, we expect the goods trade surplus to rise in a sustainable manner,” ANZ stated, according to The Edge Markets. “Secondly, we anticipate a narrowing of the deficit on the financial account, owing to higher net foreign direct investment flows.”
ANZ emphasized that these benefits depend on the ringgit maintaining its current gains.
US lowering interest rates
On Tuesday, US Federal Reserve Chairman Jerome Powell indicated that a decision to lower interest rates must preempt further declines in inflation to avoid overcorrection. This statement led markets to anticipate imminent rate cuts.
The US had previously raised interest rates rapidly and aggressively to as high as 5.5 percent in an effort to control runaway inflation, which had caused a significant influx toward the dollar for interest income.
![Ringgit Surges To All-Time High In 6 Months, Currently The Best Performing Currency In Asia | Weirdkaya We are hiring writers!](https://cdn.weirdkaya.com/wp-content/uploads/weirdkaya-intern-looking-v2-resized.png)
![Ringgit Surges To All-Time High In 6 Months, Currently The Best Performing Currency In Asia | Weirdkaya We are hiring writers!](https://cdn.weirdkaya.com/wp-content/uploads/weirdkaya-intern-looking-v2-resized.png)