Ringgit Strengthens as Malaysia Intensifies Efforts to Boost Currency

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Malaysia’s ringgit surged to a one-month high following increased coordination between policymakers and state-linked firms to lift the currency from a 26-year low. The currency strengthened by as much as 0.6 percent to 4.7185 per US dollar in early Asian trading, marking its strongest level since February 2nd. Notably, the ringgit has emerged as the best-performing currency in Asia over the past week.

Policymakers have intensified efforts to attract more inflows into the market by encouraging state-linked firms to repatriate foreign investment income and consistently convert it into ringgit. Bank Negara Malaysia, the central bank, announced its intention to enhance engagements with corporates and investors to promote conversions and improve sentiment towards the ringgit.

Saktiandi Supaat, head of foreign exchange research at Malayan Banking in Singapore, suggested that the early trading strength of the ringgit could be attributed to the increased conversion to ringgit.

Malaysian authorities have emphasized that the ringgit should exhibit strength in line with the nation’s improving economic prospects. The central bank stands ready to sell US dollars from its reserves to prevent excessive fluctuations in the ringgit’s value.