The ringgit broke the RM4.00 barrier, reaching a seven-year high driven by domestic economic reforms and policy stability, analysts say.
KUALA LUMPUR: The ringgit has broken through the psychological RM4.00 barrier against the US dollar, reaching its strongest level in over seven years.
Analysts attribute this superlative performance to solid domestic economic fundamentals rather than expectations of US Federal Reserve rate cuts.
The currency touched an intra-day high of 3.99, a level last seen on 18 June 2018.
This reflects steady investor confidence in Malaysia’s economy, buoyed by Bank Negara Malaysia’s decision to maintain the Overnight Policy Rate at 2.75%.
ALSO READ: Ringgit hits 3.99 per USD, strongest level in over 7 years
Khazanah Research Institute chairman Nungsari Ahmad Radhi said market confidence stems from painful but necessary reforms.
“We did some right things, some painful things that gave the market confidence in the economy and in the ringgit,” he told Bernama.
He cited the enactment of the Fiscal Responsibility Act and the rationalisation of subsidy schemes as key commitments.
The economy grew robustly at nearly 5% in 2025 while containing inflation, despite external headwinds.
On a year-on-year basis, the ringgit has appreciated by 9.85% against the US dollar.
Externally, downward pressure on the US dollar from policy uncertainty and rising debt has also influenced the ringgit’s strength.
Domestically, monetary policy and a record trade performance have further reinforced positive sentiment.
Malaysia’s total trade surpassed RM3 trillion for the first time in 2025, reaching RM3.06 trillion.
This resulted in a trade surplus of RM151.80 billion, with exports hitting a record RM1.60 trillion.
Universiti Utara Malaysia senior lecturer Muhammad Ridhuan Bos Abdullah said the government’s industrial policy is showing results.
“The MADANI Government’s strategy of strengthening the value chain is showing results,” he said.
IPPFA Sdn Bhd director Mohd Sedek Jantan said the speed of the ringgit’s move is telling.
“It suggests that markets are no longer waiting for proof of reform, but are actively pricing in the reality,” he stated.
He emphasised that the currency’s strength is increasingly anchored in domestic fundamentals and policy clarity.
Sustained foreign investor demand for Malaysian equities and ringgit-denominated bonds is now a key driver.
Mohd Sedek expects the ringgit’s strength to continue, supported by private consumption and tourism inflows.
He views the move as a structural re-rating of Malaysia’s economic narrative, not a cyclical swing. – Bernama
