The Malaysian Ringgit (MYR) has been gaining ground against major currencies recently, catching the attention of investors, businesses, and travellers alike. (Some of you were surprised 😬) But, what’s driving this upward trend?
Currency fluctuations can often seem complex, but understanding the factors behind the Ringgit’s strength can provide valuable insights into Malaysia's economic landscape.
In this post, we'll break down the top 3 reasons fuelling the Ringgit's rise. Whether you’re a savvy investor or just curious about how this affects your wallet, read on to find out what’s behind the Ringgit’s recent surge!
Below are extracted from the Keynote Address by BNM's Deputy Governor Adnan Zaylani at IFN Asia Forum 2024 on 25 September 2024:
- The ringgit, along with regional currencies, have been appreciating against the US dollar notably since early July following greater clarity on the interest rate path of developed countries, especially the US Federal Reserve.The narrowing of interest rate differentials with the US would be conducive to favour portfolio inflows, especially given Malaysia’s positive economic prospects.
- The domestic landscape is also quite positive. Ongoing government structural reforms, subsidy rationalisation and social protection enhancements offer a window of opportunity to pursue meaningful change.
- Furthermore, the coordinated actions between the Government and BNM, which has already facilitated a better balance for flows, will continue and this will provide sustainable support for the ringgit.
Importantly, ongoing structural reforms by the Government coupled with improving economic prospects will continue to sustain global interest for investment in Malaysia.
These factors, either individually or in combination, contribute to the recent strength of the Ringgit in the currency markets.
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