Ringgit rises to 3.9130 against US dollar, supported by strong economic fundamentalsEditors Picks, FeaturedBy adminJanuary 29, 20261Share:
KUALA LUMPUR: The ringgit opened slightly stronger against the US dollar on Thursday, supported by confidence in Malaysia’s economic growth and strong domestic fundamentals, as investors scrutinised the US Federal Reserve’s (Fed) decision to maintain interest rates.
At 8am, the local currency was trading at 3.9130/9230 against the US dollar, up from Wednesday’s closing level of 3.9175/9235.
Today’s opening trade put the ringgit near its strongest level against the US dollar since April 2018, when it hit 3.9030.
Bank Muamalat Malaysia Bhd Chief Economist Mohd Afzanizam Abdul Rashid said the market had generally taken note of the Fed’s decision, with the focus now shifting to the appointment of a new Fed chairman, which could potentially influence market sentiment following President Donald Trump’s push for lower interest rates.
However, he said the US Dollar Index (DXY) rose 0.26 percent on Thursday morning.
Yesterday, Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour said Malaysia’s economic growth prospects continue to be supported by strong fundamentals, a diversified economy and resilient domestic demand.
“Our export markets are also diverse. We do not trade with just one country, but with many economies. No single country contributes more than 15 percent to Malaysia’s exports. This shows the level of diversity we have,” he said.
On fiscal policy, Abdul Rasheed said the move to rationalise subsidies for fuel, electricity, water and diesel reflected the credibility of government policies.
The Ministry of Finance, in a written response posted on the Parliament website, said the transition from bulk RON95 petrol subsidies to targeted subsidies through BUDI MADANI (BUDI95) is expected to reduce subsidy leakage and generate fiscal savings of around RM2.5 billion to RM4 billion per year.
The ministry also announced that sales tax on low-value goods contributed revenue of RM817 million last year, up from RM476 million in 2024.
Meanwhile, the ringgit traded mostly higher against major currency groups and regional peers.
The local currency strengthened against the euro to 4.6870/6990 from Wednesday’s closing level of 4.6955/7027 and rose against the Japanese yen to 2.5558/5625 from 2.5652/5692, but weakened against the British pound to 5.4097/4235 from 5.4011/4093.
The ringgit also rose against the Singapore dollar to 3.1019/1103 from 3.1072/1122, increased against the Thai baht to 12.5658/6097 from 12.6135/6389, strengthened against the Indonesian rupiah to 233.9/234.7 from 234.2/234.7, and rose against the Philippine peso to 6.66/6.68 from 6.67/6.68 previously.
— BERNAMA
