The Malaysian ringgit, Asia’s top-performing currency this year, is approaching a four-year high as stronger economic momentum and easing global trade tensions attract offshore investors to local debt.
Analysts from BNY and Maybank expect the ringgit to strengthen past 4.1 per US dollar, potentially reaching levels not seen since May 2021, supported by the central bank’s decision to hold interest rates steady and the economy’s steady growth.
Foreign investors have purchased nearly US$4 billion (S$5.2 billion) in Malaysian bonds this year, according to Bloomberg data, providing strong support for the currency.
Malaysia’s export-driven economy is benefiting from a rebound in global demand, with third-quarter growth exceeding expectations. Investor confidence has also been boosted by a thaw in US-China trade relations, Malaysia’s two largest export markets, which has renewed foreign interest in local assets.
“Ringgit sentiment continues to remain positive,” Maybank strategists led by Saktiandi Supaat said in a client note. They added that momentum is building and there is a “wall of cash that can still be converted” from large corporate foreign currency deposits.
The ringgit was largely unchanged at 4.13 per US dollar in early trading on November 13.
