Ringgit Expected to Trade Between RM4.07 and RM4.10 Against Dollar

The Malaysian Ringgit is expected to hover between RM4.07 and RM4.10 against the U.S. dollar over the next six months, supported by a strong domestic economy. This outlook persists even as global demand for the U.S. dollar remains high.

Professor Datuk Dr. Mustafa Mohd. Hanefah from Universiti Sains Islam Malaysia (USIM) noted that the dollar's current strength is fueled by sustained demand and the resilience of the U.S. economy. However, he emphasized that the Ringgit is bolstered by Malaysia's encouraging economic performance, particularly its second-quarter growth. This is further supported by increases in global prices for crude oil and crude palm oil (MSM), which positively impact the nation's export revenues.

Professor Mohd. Rizal Palil from Universiti Kebangsaan Malaysia (UKM) described the Ringgit's current weakness against the dollar as a temporary phenomenon. He anticipates the local currency will strengthen if Malaysia's economic growth continues and the Overnight Policy Rate (OPR) remains stable. Despite its performance against the dollar, the Ringgit is faring better than many other major currencies due to Malaysia's strengthening economy relative to some ASEAN peers.

Both economists highlighted Malaysia's economic diversification as a key factor in its resilience. While oil and palm oil remain important, the electrical and electronics (E&E) sector has emerged as a major export driver, fueled by global demand for high-tech products. This balanced economic structure makes Malaysia more robust in the face of global economic volatility. The persistent global demand for the U.S. dollar, as a primary currency for international trade, investment, and central bank reserves, continues to exert pressure on the Ringgit, making it challenging to overcome the dollar's strength.