KUALA LUMPUR: The ringgit is projected to strengthen to 4.08 against the US dollar by the end of 2025, supported by Malaysia’s macroeconomic stability and ongoing reforms.
Kenanga Investment Bank Bhd attributed this outlook to investor rotation away from US assets and Malaysia’s improving fundamentals. Foreign exchange deposits reached a record RM292.8 billion in July, while the Qualified Resident Investor programme created stronger conversion incentives for firms.
The US dollar is expected to weaken over the next 9-12 months due to fiscal concerns and Federal Reserve easing, though a near-term rebound appears likely as market positioning normalises.
This potential dollar weakness offers an attractive entry point into emerging market assets, with Malaysia standing out as a reform-driven market.
Bank Negara Malaysia is expected to maintain its current monetary policy stance at 2.75% to preserve space for future economic shocks.
Resilient domestic demand, recovering mining sector and steady services expansion should cushion external weakness while keeping inflation manageable.
Inflation risks are building after a muted start to the year due to lagged Sales and Services Tax effects, subsidy reforms and higher minimum wages.
The absence of excess demand, improving supply capacity and targeted fiscal support should help contain price pressures despite these emerging inflationary factors. – Bernama