[TITLE>Malaysian Ringgit Navigates External Headwinds Amid Global Market Volatility
The Malaysian ringgit has come under pressure from global developments, particularly foreign portfolio adjustments, though the onshore foreign-exchange market remains fundamentally sound, according to the Financial Markets Committee (FMC).
In a recent statement, the FMC noted that the ringgit experienced a market correction this month, weakening against the US dollar. Non-resident investors adopted a cautious stance ahead of state elections, leading to portfolio adjustments following the currency’s strong performance earlier in the year.
The committee cited increased hedging activity and foreign fund rebalancing—driven by the removal of six Malaysian stocks from the MSCI Malaysia Index—as additional factors weighing on the ringgit. While concerns over the US-Iran conflict have subsided, investor sentiment remains capped by expectations that US interest rates will remain elevated amid persistent inflation risks, maintaining a firm US dollar and pressuring regional currencies including the ringgit.
