Will the ringgit sustain its strength beyond RM3.90 against the US dollar?

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The Ringgit's Sustained Strength Beyond RM3.90 Against the US Dollar Remains Uncertain

The Malaysian ringgit opened stronger against the US dollar on Monday, reaching 3.8970/9190, an improvement from last Friday's closing of 3.9060/9155. This upward movement is attributed to the better-than-expected fourth quarter 2025 gross domestic product (GDP) growth of 6.3 per cent. While analysts suggest the ringgit may attempt to breach the psychological RM3.9000 level, information regarding its ability to sustain this strength beyond that point is not definitively covered.
Positive Momentum Driven by Strong GDP Growth

The ringgit's opening strength on Monday is directly linked to the release of robust economic data. The fourth quarter 2025 GDP growth figure of 6.3 per cent surpassed expectations, providing positive momentum for the local currency. This economic performance indicates a resilient economy amidst prevailing external uncertainties.
Potential for Upward GDP Forecast Revision

Following the strong fourth-quarter performance, there is an expectation that official GDP forecasts for 2026 might be revised upwards. The current projection stands between 4.0 per cent and 4.5 per cent. An upward revision would signify continued economic strength, which could support the ringgit's valuation.
Narrowing Interest Rate Gap with the US

An anticipated easing of monetary policy by the US Federal Reserve this year is expected to narrow the interest rate gap between the US Federal funds rate and Malaysia's Overnight Policy Rate (OPR). This development could make Malaysian assets more attractive, potentially bolstering the ringgit. Consequently, analysts foresee the ringgit attempting to break the RM3.9000 level against the US dollar.
Mixed Performance Against Other Currencies

While the ringgit strengthened against the US dollar, its performance against other major currencies showed a mixed trend. It appreciated against the euro and the British pound, but depreciated against the Japanese yen. Against its ASEAN peers, the ringgit traded mostly higher, showing gains against the Singapore dollar, Thai baht, Indonesian rupiah, and Philippine peso.

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Will the ringgit sustain its strength beyond RM3.90 against the US dollar?

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