Ringgit surges most since 2015 on inflows, optimism

HONG KONG - The ringgit jumped the most in nine years on bets foreign capital will flood in amid optimism surrounding Malaysia’s economy.

The currency surged as much as 2.3 per cent on Aug 5, on course for its biggest gain since October 2015. It outperformed its Asian peers including the Japanese yen and the Chinese yuan. 

At 1.18pm Singapore time, the ringgit was trading up 2.1 per cent at 4.4047 per US dollar.

Against the Singapore currency, the ringgit jumped 1.3 per cent to 3.332 per Singdollar.

“The ringgit has rallied Monday as it has been under siege,” said Mingze Wu, a currency trader at StoneX Financial in Singapore. “Signs of a pivot from the Federal Reserve has allowed the pressure on the ringgit to be released.” 

After three years of losses, the ringgit is outperforming its Asian peers in 2024 as the government drove policies to boost foreign investments and began rolling back subsidies to narrow the budget deficit. That’s helped to lure back interest from global funds, who poured US$112 million (S$149 million) into Malaysian stocks this year. 

The South-east Asian country’s economic recovery is also gathering pace, with second-quarter gross domestic product beating all estimates, supported by improving exports. 

“We believe the economic growth projections of 4 to 5 per cent in 2024 can be achieved and may go to a higher level,” a Bernama report cited Second Finance Minister Amir Hamzah Azizan as saying on Aug 1. He added that the local currency is set to strengthen further. BLOOMBERG