KUALA LUMPUR, 11 December 2025 – The Malaysian ringgit strengthened sharply on Thursday, closing at RM4.10 against the U.S. dollar, its strongest level in four and a half years, driven largely by a fresh round of U.S. Federal Reserve rate cuts and continued optimism about Malaysia’s economic outlook.
At the close of trading, the local currency was quoted around 4.1040/1105 versus the greenback, improving from Wednesday’s 4.1155/1195. This marks the firmest ringgit performance since June 2021, when it previously peaked near similar levels.
Fed Cuts and Dollar Weakness Boost Ringgit
Investors welcomed the Federal Open Market Committee’s third interest rate reduction of 2025, which cut the federal funds rate to 3.50–3.75%. The dovish shift by the U.S. central bank weakened the dollar and spurred demand for emerging-market currencies, including the ringgit.
Bank Muamalat Malaysia’s chief economist noted that the ringgit’s strength was sustained following the Fed’s policy statement, as markets reassessed U.S. rate expectations heading into 2026.
Mixed Performance Against Other Major Currencies
Despite its gains against the greenback, the ringgit saw moderate declines versus several major currencies:
- British pound
- Euro
- Japanese yen
At the same time, the Malaysian unit continued to hold stronger levels against ASEAN peers, including the Singapore dollar and Indonesian rupiah.
What’s Behind the Ringgit Rally
Analysts point to several factors supporting the ringgit’s resilience:
- Narrowing interest-rate differential between Malaysia and major economies.
- Improved investor sentiment toward Asian currencies and assets.
- Stronger regional growth outlook and ongoing demand for Malaysian exports.
Recent sessions have seen sustained momentum in the ringgit, with gains extending through multiple consecutive trading days ahead of key domestic data releases.
Outlook
Currency strategists say the ringgit’s forward path will depend on:
- Monetary policy divergence between Malaysia and the U.S.
- Capital flows into Malaysian bonds and equities.
- External demand for Malaysia’s exports.
Should global conditions remain supportive, particularly a softer U.S. dollar, the ringgit could maintain strength into 2026.
