KUALA LUMPUR – The Malaysian ringgit extended its gains on Wednesday, opening higher against the US dollar and supported by positive market sentiment following the successful conclusion of the 47th 47th ASEAN Summit in Kuala Lumpur.
At 8:00 am, the ringgit appreciated to RM4.1870/2065 per US dollar, compared with the previous day’s closing rate of RM4.1935/1985.
According to Dr Mohd Afzanizam Abdul Rashid, Chief Economist at Bank Muamalat Malaysia, the Summit reinforced regional stability and integration — factors that helped reduce the market’s risk premium and contributed to the ringgit’s stronger footing.
Dr Mohd Afzanizam also noted that the US dollar index fell 0.12 % to 98.667 points amid expectations that the Federal Reserve would deliver a 25-basis-point rate cut at the conclusion of its meeting. Additionally, improved sentiment over a potential US-China trade deal further bolstered confidence.
Against other major currencies, the ringgit opened firmer:
- British pound: RM5.5591/5850 (from RM5.5845/5911)
- Euro: RM4.8804/9031 (from RM4.8884/8942)
- Japanese yen: RM2.7591/7722 (from RM2.7605/7640)
Within ASEAN, the ringgit also strengthened against most regional peers:
- Singapore dollar: RM3.2372/2525 (from RM3.2460/2502)
- Indonesian rupiah: RM252.0/253.3 (from RM252.4/252.9)
- Philippine peso: RM7.08/7.12 (from RM7.09/7.10)
However, it eased slightly versus the Thai baht: RM12.9420/13.0111 (from RM12.9214/9424).
Looking ahead, Dr Mohd Afzanizam expects the ringgit to remain on firmer footing, with the dollar-ringgit rate trading between RM4.19 and RM4.20 in the near term. (The Star)
Key take-aways:
- The success of the ASEAN Summit has had a tangible positive impact on investor sentiment, helping lift the ringgit.
- Expectations of US monetary easing, combined with broader global optimism (e.g., US-China trade prospects), contributed to the weaker US dollar and strengthened regional currencies.
- Although the ringgit strengthened across many currency pairs, close monitoring of external risks remains essential.
Implications for business and investment:
- For Malaysian exporters and importers, currency shifts may affect cost structures and revenue conversions — stronger ringgit means increased purchasing power for imports, but potentially tighter margins for exports priced in US dollars.
- Foreign investors may view Malaysia’s currency resilience, alongside regional integration momentum, as a favourable backdrop for capital allocation in equities and bonds.
- Policymakers and market participants should continue to watch global monetary policy signals (especially from the US), regional geopolitical developments, and domestic economic indicators, as all will influence currency dynamics.
Quote:
“The Summit’s reinforcement of regional stability and integration has helped reduce market risk premium and boosted the ringgit’s appreciation.” – Dr Mohd Afzanizam Abdul Rashid, Chief Economist, Bank Muamalat Malaysia.
