Ringgit Rise Reflects Strong Economic Fundamentals, Boosts Investor Confidence

KUALA LUMPUR, Nov 19 (Bernama) -- The recent strengthening of the ringgit versus the US dollar reflects Malaysia’s underlying economic fundamentals and rising investor confidence in the country, said Sunway University economics professor Dr Yeah Kim Leng.

He said the local note has returned to a more normal level after being undervalued “for a long time.”

“The strengthening of the ringgit is a very positive sign for the economy, largely because the ringgit has been undervalued for a long time. We have only recently seen the ringgit returning to what we call a more normal level, which is very positive in terms of reflecting and strengthening investor confidence. 

“Importantly, it reflects the underlying fundamentals of the economy, for example, stronger economic growth, larger current account surplus, rising foreign reserves, and also rising foreign direct investments,” he told reporters on the sidelines of the 48th Federation of ASEAN Economic Associations Annual Conference here today.

The local note had touched the 4.12 level, appreciating to close at 4.1260/1300 on Nov 13, 2025, close to the 4.1230 level recorded on Sept 27, 2024.

According to Bank Negara Malaysia (BNM), the ringgit remained broadly stable against the US dollar with a marginal appreciation of 0.05 per cent in the third quarter (3Q) of 2025 and a year-to-date (YTD) appreciation of 8.2 per cent as of Nov 12, 2025. BNM Governor Datuk Seri Abdul Rasheed Ghaffour said both external and domestic factors drove the ringgit’s movement.

Yeah, who is also the Malaysian Economic Association president, said from an external perspective, the greenback has been depreciating as the US Federal Reserve (Fed) signalled rate cuts before year-end, which also benefits ASEAN countries. “Other factors that will weaken the greenback are the weakening of the US economy, partly because of higher inflation, and the rising fiscal deficit and debt level of the United States,” he added.

However, Yeah hopes that the US economy can achieve a soft landing that will help to stabilise the global economy.

“There are still major risks in the United States, and we are watching it very carefully this fourth quarter and especially towards the end of the year, in terms of the US government policies being crafted by US President Donald Trump.

“The uncertainties created by that kind of policy uncertainty are having a very damaging impact on investors' confidence and the overall financial market stability. I think we will have clearer indications towards the end of the year, because we are now in the middle of November, and now that the US government shutdown has been overcome, gradually we will see clearer signs of the US economy stabilising,” he added.

-- BERNAMA