KUALA LUMPUR, Jan 29 — The ringgit opened marginally firmer against the United States dollar today, supported by confidence in Malaysia’s economic growth and solid domestic fundamentals, as investors digested the US Federal Reserve’s (Fed) decision to keep interest rates unchanged.
At 8am, the local currency traded at 3.9130/9230 versus the greenback, up from yesterday’s close of 3.9175/9235.
Today’s opening put the ringgit near its strongest level against the US dollar since April 2018, when it touched 3.9030.
Bank Muamalat Malaysia Bhd chief economist Mohd Afzanizam Abdul Rashid said investors had largely priced in the Fed’s decision, with attention now shifting to the appointment of the Fed’s next chair, which could influence market sentiment given US President Donald Trump’s push for lower interest rates.
He noted, however, that the US Dollar Index (DXY) rose 0.26 per cent this morning.
Yesterday, Bank Negara Malaysia (BNM) Governor Datuk Seri Abdul Rasheed Ghaffour said Malaysia’s economic growth outlook remains supported by solid fundamentals.
He said the country’s economy is highly diversified and domestic demand remains resilient.
“Even our export market is diversified. We don't trade with just one country; we trade with many economies. No single country accounts for more than 15 per cent of Malaysia’s exports. That shows how diversified we are,” he was quoted as saying.
On fiscal policy, Rasheed highlighted that subsidy rationalisation measures for fuel, electricity, water, and diesel reflect the government’s policy credibility.
The Finance Ministry, in a written response posted on the Parliament website, said the shift from bulk RON95 petrol subsidies to targeted subsidies under BUDI Madani (BUDI95) is expected to reduce subsidy leakages and generate fiscal savings of around RM2.5 billion to RM4 billion per year.
The ministry also said sales tax on low-value goods (LVG) contributed RM817 million in revenue last year, up from RM476 million in 2024.
Meanwhile, the ringgit traded mostly higher against a basket of major currencies and regional peers.
Against other major currencies, it climbed against the euro to 4.6870/6990 from yesterday’s close of 4.6955/7027, and rose versus the Japanese yen to 2.5558/5625 from 2.5652/5692, but fell against the British pound to 5.4097/4235 from 5.4011/4093.
It strengthened further against the Singapore dollar to 3.1019/1103 from 3.1072/1122, advanced versus the Thai baht to 12.5658/6097 from 12.6135/6389, firmed against the Indonesian rupiah to 233.9/234.7 from 234.2/234.7, and rose against the Philippine peso to 6.66/6.68 from 6.67/6.68 previously.
