Kuala lumpur: Hong Leong Bank Bhd (HLB) anticipates that the ringgit will maintain its upward trajectory, exhibiting strong fundamental potential, after it opened at 4.12 against the US dollar on Wednesday, marking its highest point since September 30, 2024.
According to BERNAMA News Agency, HLB’s managing director of global markets, Hor Kwok Wai, attributed the ringgit’s performance to Malaysia’s improved economic standing. He highlighted the influence of reduced US-Malaysia trade tensions and the positive outcomes of the ASEAN Summit, alongside Malaysia’s commitment to fiscal discipline.
Hor emphasized that external confidence is being bolstered by a recent reciprocal trade agreement with the United States, reducing bilateral trade tensions. The conclusion of the ASEAN Summit in Malaysia also played a role, attracting foreign direct investment and portfolio inflows, particularly into Malaysian bond and equity markets. This stability is expected to lead to a slower pace of foreign reserves accumulation by the central bank.
He also noted that a weaker US dollar outlook, following recent labour data, supports the ringgit’s strength. This data suggests a potential easing of Federal Reserve policies, narrowing the yield differential between the US and Malaysia.
Domestically, Prime Minister Datuk Seri Anwar Ibrahim’s remarks about potential GDP growth exceeding the forecasted 4.0-4.8 per cent range for 2025 further boosts confidence. This indicates a strong economic trajectory for Malaysia.
Hor additionally highlighted that this upward momentum validates Malaysia’s fiscal sustainability efforts, reinforced by the recently tabled Budget 2026. The budget aims for a fiscal deficit of 3.5 per cent of GDP for 2026, underscoring disciplined economic management.
The bank maintains a positive outlook on the ringgit, supported by Malaysia’s robust fundamentals and growth prospects. With the 2025 GDP growth expected to reach the upper end of forecasts, the ringgit is projected to appreciate steadily, targeting 4.05 by mid-2026.