Ringgit extends gains as Fed rate-hike expectations ease

KUALA LUMPUR: The Malaysian ringgit extended its gains against the US dollar today, as fading expectations of a US Federal Reserve interest rate hike in September dampened the greenback's appeal. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid attributed the ringgit's appreciation to lower odds of a September FOMC meeting rate hike, coupled with positive sentiment towards the Malaysian economy.

Finance Minister II Amir Hamzah Azizan highlighted Malaysia's strong economic growth in the first half of the year, surpassing Bank Negara Malaysia's GDP projection of 4% to 5%. The economy expanded by 5.4% in Q1 and 6% in Q2, resulting in a 5.7% growth rate for the first half of 2026. However, Afzanizam cautioned that market sentiment remains delicate, as surging crude oil prices might drive inflation higher toward the year's end, potentially reigniting the rate hike narrative.

At 6pm, the ringgit climbed to 4.0575/4.0615 against the US dollar from the previous close of 4.0585/4.0630. Throughout the day, the local currency strengthened against a range of major currencies, including the Japanese yen, British pound, euro, Philippine peso, Thai baht, Indonesian rupiah, and Singapore dollar.