Kuala lumpur: The MADANI Government's strategic measures to bolster the economy have resulted in the ringgit surpassing the psychological threshold of 4.0 against the US dollar, achieving a seven-year peak of 3.99 during intra-day trading.
According to BERNAMA News Agency, financial reforms, structural adjustments, and policy recalibration have led to increased growth, confidence, and capital inflows. The ringgit's current performance indicates its strength is rooted in domestic economic fundamentals rather than being influenced by US Federal Reserve rate cuts.
This trend demonstrates consistent investor confidence in the Malaysian currency and the broader economy, supported by maintaining the Overnight Policy Rate at 2.75 percent, which balances domestic activity and price stability. The ringgit also advanced against other major and regional currencies in cross trading.
Khazanah Research Institute (KRI) chairman, Nungsari Ahmad Radhi, highlighted Malaysia's strong commitment to economic reform by enacting the Fiscal Responsibility Act and optimizing subsidy schemes to reduce inefficiencies and corruption. These measures have contributed to containing inflation and achieving nearly five percent economic growth in 2025, despite global uncertainties.
The ringgit's appreciation against the US dollar, reaching 3.99, was last observed in June 2018. Over the past year, the ringgit has appreciated by 9.85 percent from 4.4420/4465.
External factors have also played a role in the ringgit's performance. Nungsari noted that policy uncertainty and rising debt levels in the United States have put downward pressure on the US dollar, affecting its demand and increasing the attractiveness of commodities like gold as alternative value stores.
Domestically, monetary policy and trade dynamics have further enhanced sentiment. Muhammad Ridhuan Bos Abdullah, a senior lecturer at Universiti Utara Malaysia, noted that the country's trade balance is improving due to Bank Negara Malaysia's expansionary monetary policy, which has bolstered investor confidence.
Malaysia's total trade in 2025 reached a record RM3.06 trillion, a 6.3 percent increase from the previous year, with exports surpassing RM1 trillion for the fifth consecutive year. The MADANI Government's fiscal policies and industrial strategies are showing promising results, particularly in strengthening the value chain.
Market strategists see these developments as an affirmation of Malaysia's economic trajectory. Mohd Sedek Jantan of IPPFA Sdn Bhd emphasized that the ringgit's new strength is driven by domestic fundamentals and clear government policy directions, reducing uncertainty and enhancing macroeconomic credibility.
Mohd Sedek anticipates continued strengthening of the ringgit, supported by increased private consumption, tourism inflows, and global fund managers' interest in Malaysia's stable economic policies. He highlighted that Malaysia's coherent economic policy structure and strategic hedging against global trade uncertainties suggest a structural re-rating of the ringgit rather than a transient currency fluctuation.