KUALA LUMPUR, Oct. 9 (Xinhua) -- Economists have foreseen the Malaysian ringgit to strengthen against the U.S. dollar, supported by expectations of U.S. Federal Reserve (Fed) rate cuts and Malaysia's resilient economic fundamentals.
MBSB Research said in a recent report that it projected the ringgit to remain on a strengthening trend in the fourth quarter and to continue into 2026.
"This outlook is supported by our expectations that the interest rate differential between the overnight policy rate (OPR) and the Fed's federal funds rate will narrow," said the research house.
According to MBSB, further rate cuts by the Fed and an increase in global risk appetite will facilitate a recovery in capital flows into the emerging markets, with Malaysia as one of the beneficiaries.
Fundamentally, it expects Malaysia's strong economic growth, elevated commodity prices, and continued current account surplus to also support the ringgit.
UOB Global Economics & Market Research also said in its recent report that it anticipated USD/MYR to resume its downward trajectory as the Fed begins its rate-cutting cycle in September, likely triggering broad-based USD weakness.
On the domestic front, it highlighted that Malaysia's economic fundamentals remain resilient, supported by steady gross domestic product growth, ongoing foreign direct investment inflows, and a sustained -- though narrower -- current account surplus.
TA Securities also maintained its view that more positive developments are expected for the ringgit.
"Should market sentiment tilt positively, the ringgit could potentially retest its immediate support at 4.10-4.15 ringgit per USD by year end," said the research house. Enditem
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