Ringgit rises to 13-month high on fading rate-cut view, growth outlook

THE Malaysian ringgit gained to the strongest in more than a year on fading expectations for a central bank interest-rate cut and by renewed optimism over growth. 

The currency rose 0.1 per cent to 4.1790 on Friday, the highest since October 2024. Expectations of an extended hold from Bank Negara Malaysia, an improving growth outlook, and foreign debt inflows are providing a tailwind for the currency.  

The improving external demand may provide a further boost to Malaysia’s economy, which recorded its fastest pace of growth in a year last quarter. China and the US - Malaysia’s largest export partners - extended their tariff truce last week after weeks of threats.

The local currency has also been supported by US$1 billion of foreign bond inflows in October, following a US$1.7 billion outflow in September. 

Bank Negara Malaysia kept interest rates unchanged as expected on Thursday. Ringgit swaps are pricing for rates to be held over the next 12 months. BLOOMBERG