The Malaysian ringgit continued its strong rally on Tuesday (Jan 27), trading at 3.9540 against the US dollar at the lunch break, marking its strongest performance in more than seven years.
The level represents a fresh high not seen since at least May 15, 2018, when the ringgit last stood at the same level against the greenback. Earlier in the day, the currency had strengthened as much as 0.8 per cent, reaching 3.9750 per US dollar in morning trading at around 8am, compared with Monday’s close.
In contrast, the ringgit had largely traded within a weaker range of between 4.10 and 4.80 against the US dollar from 2019 through 2025, according to local media reports.
Prime Minister Anwar Ibrahim welcomed the recent appreciation, saying it has brought positive effects to the Malaysian economy, even as he acknowledged potential concerns related to trade.
“Under normal circumstances, when the ringgit strengthens, there are positive effects, although there are some concerns related to exports and imports,” Anwar was quoted as saying in parliament by the New Straits Times (NST).
He added that a gradual and prudent strengthening of the currency would be ideal, but noted that investor confidence can sometimes drive movements beyond policymakers’ expectations.
“No country would want to see its currency depreciate far below its actual strength,” Anwar said.
The prime minister was responding to a question from Kubang Pasu Member of Parliament Ku Abdul Rahman Ku Ismail, who sought clarification on the impact of the ringgit’s appreciation on exports and imports, as well as the factors behind its recent gains.
Anwar said the stronger ringgit reflects rising confidence in Malaysia’s economic system and increased investment inflows.
“The ringgit had weakened for a long time, and when actions and activities demonstrate confidence in the national economic system and increased investment, this contributes to its strengthening,” he said.
Bank Muamalat Malaysia chief economist Mohd Afzanizam Abdul Rashid described the move below the 4.00 level as “highly significant”. He said sentiment toward the ringgit had been weak for years but is now improving due to both external and domestic factors.
Externally, he cited the US Federal Reserve’s interest rate cuts and expectations of intervention to support the Japanese yen, which imply a weaker US dollar. Domestically, Malaysia’s economic prospects remain positive despite global uncertainties.
While analysts cautioned that a stronger ringgit could weigh on exporters and tourism, they broadly agreed that the currency’s appreciation reflects solid fundamentals and is a net positive for Malaysia.
