The ringgit's rise against the US dollar has sparked interest, with a renewed demand for the local currency. This surge comes after a steady performance by Malaysia's economy, as indicated by the latest GDP report.
At the start of the trading day, the ringgit stood at 4.1230/4.1390, a notable improvement from last Friday's close of 4.1290/4.1345. This strength has pushed the ringgit to a level not seen in over a year, with the local note trading at 4.1210 at the close on September 30, 2024.
Afzanizam Rashid, chief economist at Bank Muamalat Malaysia Bhd, attributes this growth to Malaysia's third-quarter 2025 GDP growth of 5.2%, which aligns with consensus expectations. He believes this steady economic momentum provides medium-term support for the ringgit.
However, Rashid cautions that the ringgit may experience some correction due to its overbought condition. Additionally, the US Federal Reserve's (Fed) decision on a potential rate cut in December is uncertain, with some Fed members favoring a steady approach.
Despite these considerations, the ringgit traded higher against a basket of major currencies in the early session today. It strengthened against the yen, euro, and British pound, while trading mostly higher against Asean currencies, except for the Singapore dollar, which eased slightly.
The ringgit's performance against other Asean currencies was impressive, rising against the Thai baht, Indonesian rupiah, and Philippine peso.
But here's where it gets controversial: with the ringgit's strong performance, will it continue to soar, or will it face a correction? And what impact will the Fed's decision have on the ringgit's trajectory? These are questions that investors and analysts are grappling with, and the answers could shape the ringgit's future.
What's your take on the ringgit's prospects? Do you think it will maintain its strength, or is a correction on the horizon? Share your thoughts and predictions in the comments below!
