THE Malaysian ringgit opened higher against the US dollar and other ASEAN currencies today, driven by stronger-than-expected GDP growth in the fourth quarter (4Q) of 2024, according to analysts.
At 8am, the ringgit traded at 4.4265/4350 against the US dollar, an improvement from Friday’s closing rate of 4.4310/4385.
Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, attributed the ringgit’s rise to Malaysia’s stronger-than-anticipated GDP growth for 4Q 2024, which signaled resilience in the country’s economy.
He highlighted that the country’s fiscal deficit for 2024 was lower than initially forecast, registering RM79.2 billion or 4.1% of GDP, compared to the government's earlier estimate of RM84.3 billion or 4.3% of GDP.
This improvement, Afzanizam noted, indicates positive progress in Malaysia's fiscal consolidation efforts, which could have a favourable impact on its credit rating.
In light of these developments, Afzanizam told Bernama today that projected that the ringgit could test the immediate support level of 4.43 against the US dollar today.
He also pointed to weaker consumer spending in the United States as a contributing factor, with signs that the US Federal Reserve may become more cautious due to the slowdown in consumer spending.
January's retail sales data in the US, which showed a month-on-month decline of 0.9%, came in well below the expected -0.1%, reinforcing concerns of a potential economic slowdown. This, Afzanizam suggested, may lead the Fed to reconsider its policies moving forward.
Meanwhile, the ringgit saw gains against other major currencies. It strengthened against the euro, rising to 4.6425/6514 from Friday’s 4.6437/6515, and advanced against the British pound to 5.5708/5814 from 5.5769/5863.
However, it slightly weakened against the Japanese yen, trading at 2.9124/9183 compared to 2.9048/9099 at the previous close.
The ringgit also performed well against most ASEAN currencies. It appreciated against the Singapore dollar, rising to 3.3041/3109 from 3.3055/3113, and gained against the Thai baht, strengthening to 13.1152/1485 from 13.1761/2059. Additionally, the ringgit climbed against the Indonesian rupiah to 272.3/273.0 from 272.6/273.2 and improved against the Philippine peso to 7.65/7.67 from 7.66/7.68.
Overall, the ringgit’s performance reflects a positive outlook amid strong economic indicators and a weaker US retail sector. – February 17, 2025
