On a Tuesday morning in Kuala Lumpur, the ringgit edged firmer against the US dollar and most of its major rivals, a small movement that nonetheless fits a longer pattern of a local currency standing steady while tension gathers beyond Malaysia's borders. Analysts read the calm as a sign of the economy's own underlying health, even as diplomacy in West Asia and a US policy gathering keep the market watchful. The real test lies ahead, when the central bank's monetary committee meets in early November and the question of where the nation's policy rate should go next may begin to take clearer sha
Ringgit Opens Higher Against US Dollar as Malaysian Fundamentals Offset West Asia Risks
A local currency holding firm while trouble simmers abroad.
Mark
The ringgit moved from 4.0855 to 4.0840. Why is that worth a story?
Mimi
On its own it isn't much. The point is the stability: it has stayed between RM4.07 and RM4.09 for a month while there's been news from West Asia and the US.
Mark
What are the outside factors, specifically?
Mimi
Saudi, Pakistani and Turkish officials went to Iran for talks on Monday, and the US Federal Open Market Committee started a two-day meeting on Tuesday.
Luke
Worth noting that the explanation comes from one analyst, Dr Mohd Afzanizam. He says fundamentals are supporting the ringgit, but the report offers no data on flows or trading volumes to show that.
Mimi
Fair. It's his reading of why traders behave as they do, and he calls the fundamentals resilient without itemising them here.
Mark
Was the move broad across currencies?
Mimi
Mostly. Higher against the yen, pound, euro, Singapore dollar and rupiah; softer against the baht; flat against the peso.
Luke
Those are opening quotes at 8 am. They can change by the close, so none of this says where the day ends.
Mark
And what's next?
Mimi
Bank Negara's Monetary Policy Committee meets on Nov 5, with talk of normalising the overnight policy rate.
Luke
Talk is the key word. The report says discussions are growing, not that a decision is expected, and it doesn't say what direction or size.
The Pulse
- The ringgit opened at 4.0840 against the dollar, a slight gain that sits inside a stubbornly narrow band of RM4.07 to RM4.09.
- Diplomatic envoys from Saudi Arabia, Pakistan and Turkiye travelled to Iran, and traders are weighing that uncertainty against the Fed's two-day meeting.
- Domestic fundamentals are holding the currency steady, with analysts saying Malaysia still offers value to investors despite outside risks.
- Against peers the picture is mixed: gains versus the yen, pound, euro and rupiah, but softness against the Thai baht.
- All eyes now turn to Bank Negara's November 5 meeting, where talk of normalising the overnight policy rate could finally get answers.
On a Tuesday morning in Kuala Lumpur, the ringgit edged firmer against the US dollar and most of its major rivals, a small movement that nonetheless fits a longer pattern of a local currency standing steady while tension gathers beyond Malaysia's borders. Analysts read the calm as a sign of the economy's own underlying health, even as diplomacy in West Asia and a US policy gathering keep the market watchful. The real test lies ahead, when the central bank's monetary committee meets in early November and the question of where the nation's policy rate should go next may begin to take clearer shape.
At 8 am in Kuala Lumpur on Tuesday, the ringgit was quoted at 4.0840 against the US dollar, a shade stronger than the previous evening's close. The movement was modest, but it continued a pattern that analysts have been tracking for weeks: a local currency holding firm while unrest and uncertainty gather elsewhere.
Chief economist Dr Mohd Afzanizam Abdul Rashid of Bank Muamalat Malaysia told Bernama that Malaysia's resilient fundamentals were continuing to support the note. Traders, he said, remained focused on West Asia, where officials from Saudi Arabia, Pakistan and Turkiye had travelled to Iran for talks. The Federal Open Market Committee also began a two-day meeting that same day, adding a second external factor to weigh.
The ringgit has traded within a narrow RM4.07 to RM4.09 band over the past month. In that stillness, investors appear to be balancing distant risks against domestic strengths that still look attractive. Against other majors, the currency rose versus the yen, pound and euro, and was mostly firmer across ASEAN, though it eased against the Thai baht.
Ahead, attention is settling on Bank Negara Malaysia's Monetary Policy Committee meeting on November 5, where the question of normalising the overnight policy rate may start to become clearer.
At 8 am on Tuesday in Kuala Lumpur, the ringgit was quoted at 4.0840/0905 against the US dollar, a shade stronger than the 4.0855/0895 at which it had closed the previous session. The move was small, but it extended a pattern analysts have been watching for weeks: a local currency holding firm while trouble simmers abroad.
Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd, told Bernama that Malaysia's resilient economic fundamentals continued to underpin the currency. He pointed to the geopolitical backdrop in West Asia, where officials from Saudi Arabia, Pakistan and Turkiye travelled to Iran on Monday for diplomatic talks. That development, he said, remained firmly in focus for traders.
The timing overlapped with another major event. Members of the US Federal Open Market Committee began a two-day meeting on Tuesday, adding a second external factor for currency markets to weigh against the diplomatic news.
Mohd Afzanizam noted that the ringgit has traded in a narrow band of RM4.07 to RM4.09 against the US dollar over the past month. In his reading, traders have been balancing outside risks against domestic strengths that, he said, continue to offer value to investors. He expects the local note to hold its current trajectory through Tuesday.
The ringgit also gained against several other major currencies at the open. Versus the Japanese yen it rose to 2.5925/5968 from Monday's close of 2.5961/5988. Against the British pound it moved to 5.4497/4584 from 5.4517/4570, and against the euro it climbed to 4.5631/5703 from 4.5774/5819.
Among its ASEAN peers the picture was mostly positive. The ringgit rose against the Singapore dollar to 3.1881/1935 from 3.1920/1954 at Monday's close, and appreciated against the Indonesian rupiah to 225.2/225.6 from 225.3/225.5. It eased against the Thai baht, quoted at 12.0868/1110 compared with 12.0766/0930 previously, and was flat against the Philippine peso at 6.39/6.40.
Looking further out, market attention is turning to Bank Negara Malaysia's Monetary Policy Committee meeting on Nov 5. Discussion has been growing about normalising the overnight policy rate, or OPR, and that meeting is the next scheduled point at which the central bank's thinking on it may become clearer.
Notable Quotes
Geopolitical developments in West Asia remained in focus as officials from Saudi Arabia, Pakistan and Turkiye travelled to Iran for talks (paraphrased).— Dr Mohd Afzanizam Abdul Rashid, chief economist, Bank Muamalat Malaysia Bhd
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