What is the projected average exchange rate for the ringgit against the US dollar in 2025?

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The Ringgit is Projected to Strengthen Against the US Dollar in 2025

The Malaysian ringgit is anticipated to strengthen against the US dollar in 2025, with an average exchange rate of RM4.23 to the greenback. This projected appreciation is underpinned by several supportive economic fundamentals in Malaysia and evolving US monetary policy.
Expected Average Exchange Rate

MIDF Amanah Investment Bank Bhd forecasts that the ringgit will average at RM4.23 against the US dollar throughout 2025. This represents a strengthening trend for the local currency, despite potential headwinds.
Factors Supporting Ringgit Appreciation

Malaysia's robust growth fundamentals, including a sustained surplus in its balance of trade and current account, provide a solid foundation for ringgit strengthening. Furthermore, the bank expects the MIDF Trade-Weighted Ringgit Index (TWRI) to increase towards 95.0 by year-end, indicating a broader appreciation against other major currencies.
US Monetary Policy Influence

While US monetary policy easing is expected to be more gradual than initially anticipated, leading to potentially wide interest rate differentials, the eventual narrowing of these differences is seen as supportive of emerging market currencies. The US Federal Reserve is expected to maintain a cautious approach to rate cuts in 2025, and potential renewed inflation in the US could influence market expectations. The US dollar index (DXY) itself saw a weakening trend, declining by 0.7 per cent month-on-month in February.

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What is the projected average exchange rate for the ringgit against the US dollar in 2025?

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