Malaysia’s ringgit advanced to the strongest level in nine months against the dollar, buoyed by foreign bond inflows and a broad weakness in the US currency.
The ringgit climbed as much as 0.7% to 4.1805 per greenback, a level last seen in October. The currency has rallied in recent weeks amid signs the global trade war is easing, boosting sentiment for the export-dependent economy. Meanwhile, global funds poured $2.9 billion into Malaysia’s bonds in May, according to Bank Negara Malaysia’s latest data, the largest monthly inflow since October 2013.
"We expect the ringgit to find support from a weaker dollar,” said Lloyd Chan, FX strategist at MUFG Bank Ltd. "Ringgit bonds have also been in high demand, supporting increased foreign participation in the local government bond market.” MUFG forecasted the ringgit to rise to 4.11 per dollar by end-2025, he added.
Gains in the nation’s assets have been driven by signs that trade agreements with as many as a dozen of America’s largest trading partners are expected to be completed by the July 9 deadline. A trade truce between the US and China, the top two destinations for Malaysian exports according to 2024 data from the International Monetary Fund, has also lifted optimism.
An index of dollar strength fell over 2% in June, its sixth straight decline, on bets of Federal Reserve interest rate cuts and concerns over the widening US fiscal deficit. - Bloomberg
