Bank Negara Malaysia’s policy to boost repatriation of offshore earnings lifts the ringgit, though Fed tightening limits upside potential.
The Malaysian ringgit rose 0.4% against the US dollar after Bank Negara Malaysia reintroduced a 2024-style measure to encourage repatriation and conversion of offshore earnings. USD/MYR retreated from near 4.15, signaling early policy impact.
Analysts note the gains may be less sustainable than in 2024 due to expectations of further Federal Reserve tightening and persistent external pressures. Most Asian currencies face unfavorable yield differentials versus the US, constraining broader appreciation.
Capital flows under a high-for-longer US rate environment remain a key factor for regional FX performance, with the ringgit’s outperformance yesterday attributed to the central bank’s targeted support.