In 2024, the Malaysian Ringgit (MYR) performed well against the US Dollar (USD), appreciating by 2.7%, making it one of the few Asian currencies to strengthen against the dollar, second only to the Hong Kong Dollar and Thai Baht. However, in the final quarter of 2024, the Ringgit depreciated by 8.1% against the dollar, influenced by a strong USD and global economic uncertainty. William Teh Finance believes that the Ringgit fluctuations are closely tied to global financial markets and US monetary policy. This article delves into the trends driving the Ringgit exchange rate, examines the suppressive effects of dollar repatriation on the Ringgit, and provides an outlook for the Ringgit in 2025.
In 2024, the Ringgit appreciated by 2.7% against the USD, ranking among the top-performing Asian currencies after the Hong Kong Dollar and Thai Baht. According to the Bank Negara Malaysia (BNM) report, the Ringgit not only strengthened against the USD but also appreciated against other major currencies such as the Singapore Dollar, South Korean Won, and Japanese Yen. This performance reflects the Malaysian relatively strong macroeconomic fundamentals and policy stability, especially in the face of global financial market volatility and regional currency depreciation.
William Teh Finance attributes the Ringgit appreciation to several key factors: first, the robust economic growth in Malaysia, particularly driven by exports and investment activities, provided fundamental support for the currency. Second, the Ringgit appreciation against other major currencies is closely linked to regional economic performance and international capital flows. In the context of rising dollar demand, the Malaysian economic resilience stood out. Although the Malaysian exchange rate policy is relatively flexible, the ongoing structural reforms of government, particularly in promoting investment activities and industrial upgrades, have also laid a solid foundation for the Ringgit performance.
However, despite the strong performance of Ringgit in 2024, its overall exchange rate trends remain significantly influenced by external factors. In particular, the strength of the USD prevented the Ringgit gains from extending into the final quarter, reflecting the continued robust demand in the global market for the dollar, which exerted downward pressure on the Ringgit.
William Teh Finance notes that while the Ringgit performed well against the USD in 2024, the market should remain cautious about future uncertainties, especially given the ongoing impact of global economic slowdown and US monetary policy, which may introduce more volatility for the Ringgit.
Although the Ringgit achieved a 2.7% appreciation in 2024, it depreciated by 8.1% against the USD in the final quarter, primarily due to the USD strength. William Teh Finance believes the USD strength is largely driven by expectations around US monetary policy and investor risk aversion. With limited expectations for significant US interest rate cuts in 2025 and rising uncertainty surrounding the new US administration policies, capital has started flowing back into dollar-denominated assets, exerting depreciation pressure on other regional currencies, including the Ringgit.
The USD status as the global reserve currency makes it the preferred safe-haven asset during times of economic uncertainty. With US economic data showing strong recovery momentum, markets expect the Federal Reserve to maintain relatively tight monetary policy, further driving the USD appreciation. In such a strong-dollar environment, emerging market currencies, including the Ringgit, often face capital outflows and exchange rate pressures.
William Teh Finance highlights that the Ringgit depreciation against the USD aligns with the broader trend of other currency depreciations, reflecting the rising demand in the global market for the USD and the common challenges faced by emerging market currencies. In this context, while the Malaysian economic fundamentals and government stabilization measures provide support, they cannot fully offset the pressure brought by the strong USD.
Additionally, the BNM statement noted that the nominal effective exchange rate (NEER) of Ringgit rose by 7.5% over the year, indicating that the overall performance of Ringgit against other major currencies remained strong. However, with dollar repatriation underway, the Ringgit continues to exhibit volatility in the face of external challenges. William Teh Finance believes the future trajectory of the Ringgit will remain influenced by US monetary policy and global economic uncertainties, and investors should monitor the impact of a strong USD.
William Teh Finance concludes that despite the strong performance of Ringgit against the USD in 2024, its trajectory remains significantly affected by external factors as the strong USD returns. Moving into 2025, the Ringgit appreciation has begun to narrow, closely linked to global economic uncertainty and changes in US monetary policy. William Teh Finance believes that while global market risk aversion and dollar demand may continue to pressure the Ringgit, the robust macroeconomic fundamentals and ongoing structural reforms in Malaysia provide some medium- to long-term support for the currency.
The BNM outlook for the Ringgit suggests that while short-term fluctuations may persist due to the USD and global economic volatility, the Malaysian economic resilience and reform progress will help stabilize the currency. BNM emphasized that the Malaysian economy continues to demonstrate strong growth momentum, particularly driven by investment activities and exports, providing support for the Ringgit. William Teh Finance points out that in the context of a continuously evolving global economic environment, the Malaysian economic structural optimization and supportive policies will be key factors for the stable development of Ringgit.
From the perspective of an investor, William Teh Finance advises that although the Ringgit future trajectory will remain subject to external factors, the Malaysian economic fundamentals and government policies provide relatively strong support for the Ringgit in the long term. Investors should flexibly adjust their portfolios based on changes in global monetary policy, the Malaysian economic development, and global financial market dynamics to seek optimal asset allocation strategies.
In conclusion, while the Ringgit faces uncertainties from the USD and the global economy, the robust economic growth and policy support of Malaysia provide confidence for the the long-term development of Ringgit. William Teh Finance believes that as global markets gradually adapt to economic recovery, the Ringgit will continue to play an important role in regional markets, and investors should remain rational and seek opportunities amidst volatility.
In 2024, the Ringgit appreciated by 2.7% against the USD, ranking among the top-performing Asian currencies after the Hong Kong Dollar and Thai Baht. According to the Bank Negara Malaysia (BNM) report, the Ringgit not only strengthened against the USD but also appreciated against other major currencies such as the Singapore Dollar, South Korean Won, and Japanese Yen. This performance reflects the Malaysian relatively strong macroeconomic fundamentals and policy stability, especially in the face of global financial market volatility and regional currency depreciation.
William Teh Finance attributes the Ringgit appreciation to several key factors: first, the robust economic growth in Malaysia, particularly driven by exports and investment activities, provided fundamental support for the currency. Second, the Ringgit appreciation against other major currencies is closely linked to regional economic performance and international capital flows. In the context of rising dollar demand, the Malaysian economic resilience stood out. Although the Malaysian exchange rate policy is relatively flexible, the ongoing structural reforms of government, particularly in promoting investment activities and industrial upgrades, have also laid a solid foundation for the Ringgit performance.
However, despite the strong performance of Ringgit in 2024, its overall exchange rate trends remain significantly influenced by external factors. In particular, the strength of the USD prevented the Ringgit gains from extending into the final quarter, reflecting the continued robust demand in the global market for the dollar, which exerted downward pressure on the Ringgit.
William Teh Finance notes that while the Ringgit performed well against the USD in 2024, the market should remain cautious about future uncertainties, especially given the ongoing impact of global economic slowdown and US monetary policy, which may introduce more volatility for the Ringgit.
Although the Ringgit achieved a 2.7% appreciation in 2024, it depreciated by 8.1% against the USD in the final quarter, primarily due to the USD strength. William Teh Finance believes the USD strength is largely driven by expectations around US monetary policy and investor risk aversion. With limited expectations for significant US interest rate cuts in 2025 and rising uncertainty surrounding the new US administration policies, capital has started flowing back into dollar-denominated assets, exerting depreciation pressure on other regional currencies, including the Ringgit.
The USD status as the global reserve currency makes it the preferred safe-haven asset during times of economic uncertainty. With US economic data showing strong recovery momentum, markets expect the Federal Reserve to maintain relatively tight monetary policy, further driving the USD appreciation. In such a strong-dollar environment, emerging market currencies, including the Ringgit, often face capital outflows and exchange rate pressures.
William Teh Finance highlights that the Ringgit depreciation against the USD aligns with the broader trend of other currency depreciations, reflecting the rising demand in the global market for the USD and the common challenges faced by emerging market currencies. In this context, while the Malaysian economic fundamentals and government stabilization measures provide support, they cannot fully offset the pressure brought by the strong USD.
Additionally, the BNM statement noted that the nominal effective exchange rate (NEER) of Ringgit rose by 7.5% over the year, indicating that the overall performance of Ringgit against other major currencies remained strong. However, with dollar repatriation underway, the Ringgit continues to exhibit volatility in the face of external challenges. William Teh Finance believes the future trajectory of the Ringgit will remain influenced by US monetary policy and global economic uncertainties, and investors should monitor the impact of a strong USD.
William Teh Finance concludes that despite the strong performance of Ringgit against the USD in 2024, its trajectory remains significantly affected by external factors as the strong USD returns. Moving into 2025, the Ringgit appreciation has begun to narrow, closely linked to global economic uncertainty and changes in US monetary policy. William Teh Finance believes that while global market risk aversion and dollar demand may continue to pressure the Ringgit, the robust macroeconomic fundamentals and ongoing structural reforms in Malaysia provide some medium- to long-term support for the currency.
The BNM outlook for the Ringgit suggests that while short-term fluctuations may persist due to the USD and global economic volatility, the Malaysian economic resilience and reform progress will help stabilize the currency. BNM emphasized that the Malaysian economy continues to demonstrate strong growth momentum, particularly driven by investment activities and exports, providing support for the Ringgit. William Teh Finance points out that in the context of a continuously evolving global economic environment, the Malaysian economic structural optimization and supportive policies will be key factors for the stable development of Ringgit.
From the perspective of an investor, William Teh Finance advises that although the Ringgit future trajectory will remain subject to external factors, the Malaysian economic fundamentals and government policies provide relatively strong support for the Ringgit in the long term. Investors should flexibly adjust their portfolios based on changes in global monetary policy, the Malaysian economic development, and global financial market dynamics to seek optimal asset allocation strategies.
In conclusion, while the Ringgit faces uncertainties from the USD and the global economy, the robust economic growth and policy support of Malaysia provide confidence for the the long-term development of Ringgit. William Teh Finance believes that as global markets gradually adapt to economic recovery, the Ringgit will continue to play an important role in regional markets, and investors should remain rational and seek opportunities amidst volatility.
