Stability spurs the ringgit

Big bill: Malaysia relies heavily on imports like rice, meat, dairy and medicine. — RAJA FAISAL HISHAN/The Star

IT has been a good run for the ringgit. It continues to streng-then against the greenback, making it the best currency performer in the region.

But the stronger ringgit is more than just a currency story, it is also a political one.

Finally, we can hold our heads up high because of the firmer ringgit. Many of us may have forgotten it, but there was a time that the ringgit was in danger of dipping to RM5 against the US dollar.

For years, we worried each time the ringgit lost value.

We wondered whether it was governance or growth, and if the Malaysian leadership was heading in the right direction.

We had to pay more for our imports, especially food, which remains one of the highest bills.

Malaysia relies heavily on foreign staples like rice, meat, dairy, machinery and medicine. The import bill rose from RM35bil in 2011 to over RM55.5bil in 2020, and further surged towards RM80bil by 2024/2025.

Much of international trade is paid in US dollars and that means consumers have to pay more if the ringgit is weak.

Last week, the ringgit rose to a seven-year high to close at 3.9185 on Wednesday as improved risk sentiment and a softer dollar continued to back the ringgit. This was the strongest closing level since it hit 3.9150 in 2018.

For now, many continue to wonder how long the ringgit will continue to climb or if this is mostly the result of external factors, specifically the weaker greenback and interest rate decisions in the US.

That is only partly true. A stronger ringgit is, in fact, a vote of confidence.

To put it simply, it is the result of political stability.

We had a change of three prime ministers in one parliamentary term, from 2020 to 2022. The BBC, in its news report headlined “How Malaysia’s government collapsed in two years”, said it was a result of “unprecedented political turmoil and uncertainties”.

Malaysians paid a heavy price for those years of excessive politicking and turmoil. The ringgit, for one, took a persistent beating. But the stability over the past few years has seen it recover.

A stronger ringgit is a vote of confidence for the government. Malaysians have paid a heavy price for those years of excessive politicking and turmoil.

At the most basic level, a strengthening ringgit reflects improved demand for Malaysian assets.

Investors are more willing to hold ringgit-denominated bonds, equities, and real investments.

We hope the stronger ringgit will impact Malaysians as a whole, including lowering the cost of food and other household items, easing the cost of living pressures.

For the government, it means less fiscal stress when servicing foreign-denominated obligations.

Still, looking at the kind of unproductive political messages appearing on social media these days, one wonders if Malaysians have learnt the lessons from those tough years.

Fast forward to 2026, democracy in Malaysia has become louder but political stability remains.

We will wake up tomorrow knowing full well that Datuk Seri Anwar Ibrahim will still be the PM.

Most of us who take to the keyboard to vent or to whine take political stability for granted. It is something we hardly talk about.

Sadly, political stability is underestimated in Malaysia. This stability deserves better recognition and acknow-ledgement.

As one report aptly put it: “Political stability is not glamorous. It does not trend on social media. It does not offer quick populist wins. But markets notice it immediately. When policies are predictable, institutions function, and leadership appears durable, investors can model risk.”

Investors do not want to deal with a country that keeps changing leadership and policies. They want decisions that stick and contracts that are honoured. That alone lowers the cost of capital and supports the currency.

It all matters to Malaysia because we are an open economy that is trade dependent. Yes, a weak ringgit may help our exporters but prolonged weakness erodes purchasing power, accelerates brain drain, and raises the cost of development.

A country aspiring to move up the value chain cannot rely on cheap currency as a competitive strategy. It needs productivity, innovation, and trust.

Stability does not mean the absence of opposition, debate, or accountability. It means leadership transitions are orderly. It means policy differences are managed, not weaponised.

If Malaysia wants a currency that reflects its true potential, it must treat political stability not as side effect of power, but as a public good worth protecting.

National Journalism Laureate Datuk Seri Wong Chun Wai is the chairman of Bernama. The views expressed here are solely the writer’s own.