Ringgit Opens Higher, Gains Appeal Among Emerging Market Currencies
KUALA LUMPUR: The ringgit opened higher against the US dollar on Wednesday, as investors found Malaysia’s political stability and policy direction encouraging compared to other emerging markets.
This in turn boosted the attractiveness of the local currency amid uncertain global sentiment.
At 8 a.m., the ringgit rose to 4.4340/4410 against the US dollar from 4.4355/4390 at yesterday’s close.
Bank Muamalat Malaysia Bhd Chief Economist, Mohd Afzanizam Abdul Rashid, said that despite global challenges, the ringgit has remained resilient—appreciating 0.85% so far this year—and is currently ranked the fourth best-performing currency in Asia.
According to Bloomberg data, the Malaysian ringgit is the fourth-best performer among emerging market currencies, trailing behind the Japanese yen, Singapore dollar, and offshore Chinese renminbi.
In contrast, key peer currencies such as the Indonesian rupiah and Turkish lira experienced significant sell-offs last week, impacting sentiment across asset classes.
The Indonesian rupiah has come under pressure, depreciating 2.97% year-to-date, prompting Bank Indonesia to intervene in the currency market to curb the decline.
“The rupiah has fallen to levels last seen during the 1997–1998 Asian Financial Crisis, making it the worst-performing currency in the region and raising market concerns,” he told Bernama.
“While investors remain cautious, this situation has unexpectedly driven interest in ringgit-denominated assets,” he added.
Mohd Afzanizam noted that the USD/MYR currency pair is hovering near the immediate resistance level of RM4.4463, with technical indicators suggesting the ringgit remains in a neutral zone, indicating limited short-term movement.
Meanwhile, the US Dollar Index (DXY) has been fluctuating around the 104-point mark as recent economic data shows consumers are becoming more cautious about the US economic outlook.
He said the Conference Board’s Consumer Confidence Index dropped to 92.9 points in March, marking the fourth consecutive monthly decline.
“More notably, the Expectations Index fell to 65.2 points, remaining below the 80-point threshold for two straight months. A reading below 80 is often seen as a strong signal of a potential US economic recession,” he added.
In early trade today, the ringgit also traded mostly higher against several major currencies.
The local unit strengthened against the euro to 4.7838/7914 from 4.7908/7946 at yesterday’s close, but fell against the British pound to 5.7394/7484 from 5.7351/7396.
The ringgit also weakened against the Japanese yen to 2.9572/9620 from 2.9480/9503.
Against ASEAN currencies, the ringgit traded mostly higher.
It slipped against the Singapore dollar to 3.3184/3241 from 3.3158/3186 and fell against the Thai baht to 13.1071/1418 from 13.0633/0813.
The ringgit rose against the Philippine peso to 7.70/7.71 from 7.73/7.74, and remained flat against the Indonesian rupiah at 266.9/267.4 from 266.9/267.3.
— BERNAMA
