KUALA LUMPUR, 10 September 2025 — Kenanga Research continues to project a stronger Malaysian ringgit by year-end, reaffirming its forecast of US$1 = RM4.08 for 2025, down from an average of RM4.47 in 2024.
Structural Currency Realignment Underway
In its May economic report, Kenanga attributed the ringgit’s resilience to a faster-than-expected de-dollarisation trend, marking what it terms a structural shift in global monetary dynamics.
Investors are increasingly moving capital from U.S. dollar assets into alternatives like gold, the euro, and yen, spurred by geopolitical uncertainty and elevated U.S. fiscal risk. This shift is tilting beneficiary flows toward Asian currencies, with Malaysia among the primary gainers.
Domestic Fundamentals Provide Strong Support
Kenanga points to Malaysia’s strong macroeconomic stability and fiscal reform momentum as critical underpinnings of the ringgit’s structural gain.
Recent figures show that Bank Negara Malaysia’s international reserves reached a 10-year high in June, buoyed by revaluation gains in gold holdings despite a modest dip in ringgit terms—further reinforcing external buffers.
Regional FX trends also favor the ringgit: in June, most ASEAN currencies appreciated against the USD, guided by a softer dollar and reallocation into Euro-denominated assets, where the ringgit gained 0.6% characteristically among the performers.
Technical Signals and Outlook Trajectory
Kenanga’s near-term technical outlook shows USDMYR trading around 4.22–4.23, with support and resistance at these levels, reflecting short-term consolidation.
Outside technicals, the longer-term path shows appreciation: from 4.16 in mid-2025 to 4.08 by year-end, and potentially strengthening further toward 3.95 by end-2026, assuming sustained Fed dovishness and solid domestic reforms.
Regional Implications and Investor Confidence
Kenanga believes Malaysia is now emerging as a credible reform-oriented emerging market, attracting foreign capital flows away from USD assets due to its stability, policy clarity, and rising yields.
In the evolving currency order, where USD dominance is being challenged, the ringgit’s re-pricing is less about short-term volatility and more about structural credibility.
