The Malaysian ringgit (MYR) jumped against the USD at the close on September 24, reaching its highest level in 34 months after China unveiled a stimulus package aimed at revitalising its economy.
At 6 pm, the MYR surged to 4.1550/1605 against the USD, up from the previous day's close of 4.2000/2060, marking a year-to-date gain of 10.49%. This was the ringgit’s highest closing level since November 11, 2021, when it was at 4.1525/1545.
It also performed strongly against ASEAN and other major currencies.
According to Malaysia’s Central Bank, the currency has emerged as the best-performing in the region this year, aiming for its strongest performance since 2017.
China's central bank, the People's Bank of China, introduced broad monetary stimulus and support for the property market, leading to a rebound in China's stock market and the yuan reaching its highest level since May 2023.
Michael Wan, Senior Currency Analyst at MUFG, noted that China's economic measures have impacted not only the CNY but also other Asian currencies, including the MYR , which has benefited from these developments.
Additionally, long-standing expectations of the US Federal Reserve easing its monetary policy have supported risk-sensitive currencies like the ringgit. However, uncertainty around the US presidential election on November 5 has traders cautious about potential effects on emerging market assets.
Lynn Song, Chief Economist for ING China, expects the ringgit to face volatility in Q4 2024 after its strong rise in September, influenced by the US election and the pace of FED rate cuts./.
VNA
