KUALA LUMPUR, Jan 29 — The ringgit opened slightly stronger against the US dollar on Thursday, buoyed by confidence in Malaysia’s economic growth and solid domestic fundamentals, as investors digested the US Federal Reserve’s (Fed) decision to maintain interest rates.
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At 8am, the local currency was quoted at 3.9130/9230 versus the greenback, up from Wednesday’s close of 3.9175/9235. This put the ringgit near its strongest level against the US dollar since April 2018, when it reached 3.9030.
Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the Fed’s decision had largely been priced in by the market. He added that focus is now shifting to the appointment of the Fed’s next chair, which could influence market sentiment amid President Trump’s push for lower interest rates.
Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour yesterday reaffirmed that Malaysia’s economic growth remains underpinned by strong fundamentals. He noted that the economy is highly diversified, with resilient domestic demand, and no single country accounting for more than 15% of exports.
On fiscal policy, Abdul Rasheed highlighted that subsidy rationalisation for fuel, electricity, water, and diesel demonstrates the government’s credibility. The Finance Ministry, in a written response posted on the Parliament website, said the transition from bulk RON95 petrol subsidies to targeted Budi Madani (Budi95) subsidies is expected to cut leakages and generate annual savings of RM2.5 billion to RM4 billion.
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The ministry also reported that sales tax on low-value goods contributed RM817 million in revenue last year, up from RM476 million in 2024.
Meanwhile, the ringgit showed mixed performance against other major currencies and regional peers. It rose against the euro to 4.6870/6990 from 4.6955/7027, and against the Japanese yen to 2.5558/5625 from 2.5652/5692, but fell versus the British pound to 5.4097/4235 from 5.4011/4093.
The currency also strengthened against the Singapore dollar to 3.1019/1103 from 3.1072/1122, the Thai baht to 12.5658/6097 from 12.6135/6389, the Indonesian rupiah to 233.9/234.7 from 234.2/234.7, and the Philippine peso to 6.66/6.68 from 6.67/6.68.
– Bernama
-malaymail