Ringgit opens firmer on strong 4Q 2025 GDP, eyes RM3.90 level

KUALA LUMPUR — The Malaysian ringgit opened stronger against the US dollar on Monday, supported by positive market sentiment following better-than-expected economic growth in the fourth quarter of 2025.

At the opening bell, the local currency traded at 3.8970/9190 against the greenback, improving from last Friday’s close of 3.9060/9155. The firmer performance came after Malaysia recorded a robust 6.3 per cent gross domestic product (GDP) growth in the final quarter of 2025, surpassing earlier market expectations and reinforcing confidence in the country’s economic resilience.

According to Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid, Malaysia’s official GDP growth forecast for 2026 — currently projected between 4.0 per cent and 4.5 per cent — may be revised upward in light of the stronger economic momentum despite ongoing external uncertainties.

He noted that the country’s solid growth outlook reduces the urgency for aggressive monetary stimulus, suggesting that the Overnight Policy Rate (OPR) is likely to remain steady throughout 2026.

The economist also highlighted that the interest rate differential between the US Federal Reserve’s benchmark rate and Malaysia’s OPR is expected to narrow, particularly if the US central bank moves toward a more accommodative monetary policy stance this year. Such a shift could provide additional support to the ringgit’s strengthening trajectory.

On currency movements, the ringgit traded mostly higher against a basket of major global currencies at the opening. It appreciated against the euro to 4.6242/6503 from 4.6325/6390 at the previous close and strengthened versus the British pound to 5.3178/3479 from 5.3211/3286. However, the local note weakened slightly against the Japanese yen, trading at 2.5501/5648 compared to 2.5435/5474 earlier.

Against regional peers, the ringgit also showed stronger performance. It edged up versus the Singapore dollar to 3.0860/1042 from 3.0904/0950 and advanced against the Thai baht to 12.5273/6200 from 12.5607/5849. The currency also gained against the Indonesian rupiah at 231.4/232.8 compared with 231.9/232.4, and improved against the Philippine peso to 6.71/6.76 from 6.73/6.74 previously.

Market analysts believe the ringgit may attempt to test — and potentially break — the psychological RM3.90 level against the US dollar in the near term, driven by improving macroeconomic fundamentals and narrowing global interest rate gaps.

Overall, the stronger opening reflects renewed investor confidence in Malaysia’s economic outlook, with markets closely monitoring upcoming global monetary policy developments and domestic growth indicators that could shape the ringgit’s direction moving forward.