The ringgit kicked off Tuesday on a stronger note, extending its upward streak as investors cheered the government’s firm approach to RON95 fuel subsidy rationalisation.
By 8am, the local currency stood at 4.1885/2085 against the US dollar, firmer than Monday’s close of 4.1945/2040.
Bank Muamalat chief economist Dr Mohd Afzanizam Abdul Rashid said the government’s targeted subsidy move signals fiscal discipline while shielding consumers from cost-of-living spikes. “It’s a positive credit story and makes full use of MyKad’s embedded tech as a policy tool,” he noted, adding that more fine-tuning based on income levels could lift the ringgit further over time.
On Monday, Prime Minister Datuk Seri Anwar Ibrahim announced that the price of RON95 will drop to RM1.99 per litre from RM2.05 under the BUDI MADANI RON95 programme, effective 30 September 2025.
Meanwhile, the US Dollar Index slipped 0.31% to 97.34 points as Federal Reserve officials signalled mixed views on interest rates — some holding firm on high rates while others hint at cuts.
SPI Asset Management’s Stephen Innes said the fuel subsidy — 300 litres per month for every Malaysian regardless of income — effectively boosts household spending power. “Less spent on petrol means more spent elsewhere, which props up the domestic economy. Combine that with a weaker greenback and the ringgit’s on a good run,” he said.
The ringgit also strengthened against most major and regional currencies at the open, rising versus the yen, pound, Singapore dollar, Thai baht and Philippine peso, and holding steady against the Indonesian rupiah.
