THE ringgit opened at its strongest level in more than four years against the US dollar yesterday morning after the US Federal Reserve (Fed) cut its benchmark lending rate by 25 basis points.
At 8 a.m., the ringgit strengthened to 4.1010/1075 against the greenback, marking its highest level since October 5, 2021, according to Bloomberg.
This represented a notable improvement from Wednesday’s close of 4.1155/1195.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid noted that the Federal Open Market Committee delivered the widely anticipated 25-bps reduction at its final meeting, which concluded yesterday.
“The US Dollar Index fell 0.55 per cent to 98.671 following the decision, and the meeting indicated the possibility of further cuts in 2026 and 2027,” he told Bernama.
Mohd Afzanizam added that the Fed may hold rates steady in the short term while assessing the evolving economic outlook.
He highlighted that the ringgit has substantial upside potential, particularly as Bank Negara Malaysia is unlikely to lower its policy rate.
“Expectations of a narrowing gap between the Federal Funds Rate and the Overnight Policy Rate would support the ringgit, alongside the ongoing fiscal consolidation drive,” he said.
He further pointed to Fitch Ratings’ latest review, which signals confidence in Malaysia’s fiscal discipline, suggesting that the US dollar-ringgit pair could continue trending positively. “The local note could even test a break below the RM4.10 level at today’s close following the Fed’s decision,” Mohd Afzanizam added.
Despite gains against the US dollar, the ringgit opened lower against other major currencies. It fell versus the Japanese yen to 2.6342/6388 from 2.6240/6267, weakened against the British pound to 5.4896/4983 from 5.4781/4835, and softened versus the euro to 4.7982/8058 from 4.7884/7930.
The local currency, however, showed strength against regional currencies, climbing against the Singapore dollar to 3.1737/1789 from 3.1748/1781 and firming against the Indonesian rupiah to 245.7/246.2 from 246.5/246.9. It also opened higher against the Thai baht at 12.9112/9382 from 12.9243/9422 and strengthened versus the Philippine peso at 6.92/6.94 from 6.95/6.96.
The ringgit’s performance underscores the interplay between global monetary policy shifts and domestic fiscal stability, with analysts closely monitoring further developments in US interest rates and Malaysia’s economic outlook. - December 11, 2025
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