Ringgit rally not over yet as analysts eye Malaysia rate cuts

Malaysia's ringgit is poised to restart a rally, potentially hitting its strongest level against the US dollar in almost a year, as analysts see a dovish central bank and fiscal pledges boosting sentiment.

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KUALA LUMPUR -

The ringgit may appreciate to 4.15 per US dollar in the fourth quarter on further central bank easing, according to OCBC Bank, while Maybank forecasts 4.10 by December. MUFG Bank expects a gain of 1.5 per cent from current levels as a US tariff deal boosts Malaysia's export competitiveness.

The ringgit was trading at 4.2220 per US dollar as at 6pm local time on Aug 18. It has risen 5.8 per cent against the greenback to date in 2025. Against the Singapore currency, the ringgit was trading at 3.2919, down 0.6 per cent so far this year.

The ringgit's rebound from an April low has stalled, but upcoming inflation data may revive expectations of Bank Negara Malaysia (BNM) rate cuts, spurring bond inflows. While looser monetary policy can weigh on currencies, prospects of a Federal Reserve cut in September reduce the risk of a sell-off against the US dollar.