THE ringgit opened slightly firmer against the US dollar on Monday, underpinned by Malaysia’s stable sovereign credit outlook and improving domestic economic indicators.
At 8.02am, the local currency was quoted at 4.2000/4.2200 versus the greenback, compared with Friday’s closing level of 4.2040/4.2115.
Bank Muamalat Malaysia Bhd’s chief economist Afzanizam Rashid said the positive market sentiment followed S&P Global Ratings’ recent reaffirmation of Malaysia’s sovereign credit rating at ‘A-’ with a stable outlook — a sign of confidence in the country’s fiscal management and macroeconomic resilience.
“The country’s fiscal consolidation exercise has contributed positively to its creditworthiness. Malaysia’s fiscal deficit narrowed to 4.2% of gross domestic product (GDP) in the first half of 2025 from 5.5% in the same period last year, while the government debt level at 62% of GDP remains below the statutory limit of 65%,” he told Bernama.
In a statement issued on 20 September, the Ministry of Finance said the reaffirmed rating by S&P highlighted the strength of Malaysia’s economic fundamentals, citing a well-diversified economy, political stability, a balanced external position, and continued fiscal improvement.
Afzanizam also noted that the US Dollar Index (DXY) had rebounded after the Federal Reserve delivered an interest rate cut last week, hovering around the 97-point mark.
“It may continue to trade at that level as markets await further signals. Several Federal Reserve officials are due to speak at public forums this week, while key data — particularly the personal consumption expenditures (PCE) inflation figures — will be closely monitored,” he said.
Stephen Innes, managing director at SPI Asset Management, added that expectations of two more interest rate cuts by the Fed this year should help limit the downside risk for the ringgit in the near term.
“This comes after what appears to have been a positive phone conversation between China’s President Xi Jinping and US President Donald Trump on Friday, potentially paving the way for an in-person meeting at the 2025 APEC Economic Leaders’ Meeting in South Korea next month,” he said.
The ringgit also opened stronger against a range of major currencies.
It advanced against the Japanese yen to 2.8348/2.8485 from 2.8419/2.8471, firmed against the British pound to 5.6540/5.6810 from 5.6775/5.6876, and rose against the euro to 4.9279/4.9513 from 4.9447/4.9536.
Regionally, the local note gained ground against several ASEAN currencies. It strengthened to 3.2670/3.2830 versus the Singapore dollar from 3.2744/3.2805, appreciated to 13.1707/13.2405 against the Thai baht from 13.1973/13.2271, edged up to 252.9/254.3 against the Indonesian rupiah from 253.2/253.8, and rose slightly to 7.35/7.39 against the Philippine peso from 7.36/7.38. -September 22, 2025
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