Asian currencies: Malaysian ringgit, Indonesian rupiah extend gains

BENGALURU: In Malaysia, the ringgit strengthened 0.6percent to 4.015 against the dollar, a level not seen since January 2021. The surge came a day after the central bank left its key interest rate unchanged and projected 2025 economic growth at the upper end of forecasts, noting that momentum is expected to carry into the year ahead.

The central bank’s mostly neutral stance on its monetary policy highlighted Malaysia’s strong economic fundamentals, while optimism gained on the Southeast Asian economy’s growth prospects for the year ahead.

“Ringgit’s outperformance seen in 2025 is likely to spill over to 2026,” said Christopher Wong, a currency strategist at OCBC.

“Domestically, Malaysia’s fundamentals remain encouraging, supported by quality FDI inflows, upbeat growth, a wider trade surplus and clear commitment to fiscal consolidation.”

The Indonesian rupiah extended its recovery mode into a third consecutive session, gaining up to 16,838 against the dollar. Earlier in the week, the currency slumped to an all-time low of 16,985 on concerns of wider fiscal deficit and the central bank’s independence.

Singapore’s FTSE Straits Times index rose as much as 1.1percent to an all-time high of 4,888.960 points. The financials-heavy benchmark has gained nearly 5percent so far this year as investors eyed Singaporean banks’ stable earnings and dividend yields.

“We think the risk-on sentiment is one of the factors contributing to outperformance of the Singapore markets,” DBS Group Research analysts told Reuters.

“Investors may also be positioning in banks with potential scope for dividend upside in upcoming results, alongside the quality they offer.”