Kuala lumpur: The ringgit closed higher against the US dollar, other major currencies, and ASEAN peers on Tuesday, driven by continued optimism regarding Malaysia's economic growth prospects. At 6 pm, the ringgit rebounded to 3.9295/9360 against the US dollar, up from Friday's 3.9440/9500 close. This increase followed the Thaipusam and Federal Territory Day holiday on Monday.
According to BERNAMA News Agency, the local currency resumed its upward trend after a brief pause against the US dollar last Thursday and Friday. The Federal Reserve's decision to maintain its interest rates contributed to this momentum. On Monday, S and P Global reported that Malaysia's headline manufacturing purchasing managers' index (PMI) rose to a 20-month high of 50.2 in January 2026, up from 50.1 in December 2025, marking the third consecutive month of improvement in the sector.
Bank Muamalat Malaysia Bhd's chief economist, Dr. Mohd Afzanizam Abdul Rashid, highlighted that the PMI increase indicates businesses have been benefiting from lower input costs, aided by the stronger ringgit. 'The persistent appreciation of the ringgit reflects confidence that the Malaysian economy would be able to record respectable growth this year. Thus, traders and investors remain constructive on the ringgit today, with the currency gaining 0.41 percent,' he told Bernama.
Mohd Afzanizam also noted that the local currency continues to rise against the US dollar despite better-than-expected US economic data. The US Institute for Supply Management (ISM) reported that the US manufacturing PMI increased to 52.6 points in January from 47.9 in December 2025, surpassing consensus estimates of 48.5 points. 'This suggests that the odds of an interest rate cut in the US remain low, as improved business sentiment aligns with the Federal Reserve's assessment that economic activity is expanding at a solid pace,' he said.
At the close, the ringgit traded higher against other major currencies. It gained versus the Japanese yen to 2.5210/5253 from 2.5562/5603, appreciated against the British pound to 5.3704/3793 from 5.4163/4245, and climbed against the euro to 4.6341/6417 from 4.6957/7029 at Friday's close. The local note also showed strength against its ASEAN peers, strengthening against the Singapore dollar to 3.0919/0973 from 3.1077/1127, advancing versus the Thai baht to 12.4584/4845 from 12.5250/5544, firming against the Indonesian rupiah to 234.5/235.0 from 234.9/235.4, and rising against the Philippine peso to 6.67/6.68 from 6.69/6.71 previously.