Malaysia’s ringgit surge is a boon for some, a blow for others

While some Malaysians celebrate the strong currency, others are feeling the pinch as their income from foreign sources shrinks

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Malaysia’s ringgit has surged to its highest point in decades, boosting confidence in the economy and attracting foreign investment. Photo: Bloomberg

Published: 5:00pm, 25 Sep 2024

The recent rise in Malaysia’s currency, the ringgit, has sparked mixed reactions among Malaysians, with some celebrating the currency’s recovery after nearing historic lows, while others are concerned about the diminishing purchasing power of their income.

The ringgit is on track for its best quarter since 1973, having appreciated more than 12 per cent against the US dollar, making it the best-performing emerging market currency, according to a Bloomberg report.

Trading at 4.12 ringgit to the US dollar on Wednesday afternoon, it has already surpassed economists’ expectations of closing the year at 4.43.

For Malaysians, the exchange rate of the ringgit against the US dollar, as well as regional currencies like the Singapore dollar, and the Thai baht serves as an indicator for how well the economy is doing and reflects confidence in the government.

Supporters of Prime Minister Anwar Ibrahim see this as evidence of his financial acumen which is pivoting from relative political stability after years of turmoil.

Malaysian ringgit banknotes inside a cash register. Malaysia’s currency has surges 12 per cent against the US dollar this quarter Photo: Bloomberg

Speaking to This Week in Asia, Mohd Afzanizam Abdul Rashid, the chief economist at Bank Muamalat Malaysia, said the stability has facilitated more effective policymaking and implementation, boosting confidence in the ringgit.