Ringgit Surges Amidst Economic Optimism and Foreign Inflows

A Report by CYS Global Remit Counterparty Sales & Alliance Unit 

The Malaysian Ringgit has significantly outperformed its Asian counterparts, driven by optimism about Malaysia’s economic recovery and strategic government policies. On August 5th, the Ringgit surged 2.3%, marking its largest gain since October 2015, fuelled by the U.S. Federal Reserve's pivot easing currency pressures. 

Proactive government measures, such as attracting foreign investments and reducing subsidies, have boosted investor confidence, resulting in substantial foreign inflows into Malaysian stocks and bonds. The Ringgit has climbed nearly 1% since February, with forecasts predicting it to strengthen further, reaching 4.65 per U.S. Dollar by year-end. 

This positive trajectory is supported by improved growth prospects, a widening current account surplus, and recovery in exports, which grew 7.3% in May. Bank Negara Malaysia highlights the Ringgit’s appreciation potential amid U.S. rate cuts. 

Though challenges remain, including February’s historic low against the U.S. Dollar, analysts expect these to fade, bolstering the Ringgit’s sustained recovery. Continued global confidence in Malaysian assets, a stabilizing Chinese economy, and strategic economic policies are set to support the Ringgit's upward momentum through 2024. 

Sources:

https://www.straitstimes.com/business/ringgit-overcomes-this-year-s-slow-start-as-inflows-gather-pace?&utm_source=telegram&utm_medium=social-media&utm_campaign=addtoany 

https://www.straitstimes.com/business/ringgit-set-to-extend-gains-on-recovering-exports-fed-rate-cuts?&utm_source=telegram&utm_medium=social-media&utm_campaign=addtoany 

https://www.straitstimes.com/business/ringgit-surges-most-since-2015-on-inflows-optimism?utm_campaign=stfb&utm_medium=social&utm_source=facebook&fbclid=IwZXh0bgNhZW0CMTEAAR1VnJLTcNv3vnhRdkxWRobmhngRZL5IxUebDcxr71LlWYQmfVON9fZuwaU_aem_cR41aSmOWACE7NbtIH7oUg&sfnsn=wa