THE ringgit strengthened for a fourth consecutive day at the open, supported by investor confidence in the government’s calibrated approach to fuel subsidies and signs of temporary easing in geopolitical tensions in West Asia.
The local currency rose to 3.9855/4.0050 against the US dollar at 8am, improving from Thursday’s close of 3.9920/9955, as markets responded positively to policy clarity and external developments affecting global risk sentiment.
In a special address, Prime Minister Datuk Seri Anwar Ibrahim announced that the monthly individual quota for subsidised RON95 petrol under the BUDI95 scheme will be reduced to 200 litres from 300 litres effective April 1, citing pressures stemming from the ongoing regional conflict.
The adjustment is expected to have limited impact on most consumers, with average monthly usage at around 100 litres and nearly 90 per cent of users consuming below the new threshold.
Anwar also highlighted that Iran had allowed Malaysian oil tankers safe passage through the Strait of Hormuz, a key development amid heightened tensions in the region.
Economists said the policy signalled a measured effort to balance fiscal responsibility with cost-of-living considerations.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the move demonstrates sensitivity to both domestic and external pressures.
“This should be positive for the ringgit as the government is cognisant of the ripple effect from the war in Iran and provides a timely response,” he said.
External factors also played a role in shaping currency movements.
Stephen Innes, managing partner at SPI Asset Management, pointed to a shift in sentiment following remarks by US President Donald Trump, who granted a 10-day extension on potential strikes targeting Iranian energy infrastructure.
“The extension has acted more as a pressure release than a true reversal. That said, market traders are likely to adopt a defensive posture, leaning long US dollars into the weekend given the ongoing risk of escalation once that window closes,” he said.
The ringgit also posted broad-based gains against other major and regional currencies.
It rose versus the Japanese yen to 2.4951/5077 from 2.5025/5049 at Thursday’s close, increased against the British pound to 5.3143/3403 from 5.3301/3348 yesterday and climbed vis-à-vis the euro to 4.5969/6194 from 4.6140/6180 previously.
The local currency appreciated versus the Singapore dollar to 3.0994/1148 from 3.1102/1132 on Thursday, gained versus the Thai baht to 12.0868/1566 from 12.1529/1695 yesterday, edged up vis-a-vis the Indonesian rupiah to 235.7/237.0 from 236.1/236.4 at the previous close and inched up against the Philippine peso to 6.61/6.65 from 6.62/6.63 previously. - March 27, 2026
