The ringgit opened higher against the US dollar and most major currencies on Friday, supported by demand for the local currency, even as robust US economic data continued to bolster the greenback.
At 8:00 a.m., the ringgit appreciated to 4.0820/4.0885 against the US dollar, up from 4.0830/4.0875 at Thursday's close.
Bank Muamalat Malaysia Bhd Chief Economist Afzanizam Rashid noted that the US Institute for Supply Management (ISM) Manufacturing Purchasing Managers' Index (PMI) stood at 54.5 points in September, slightly lower than the 54.6 points recorded the previous month.
However, the new orders sub-index rose to 55.3 points from 53.7 points, indicating that business activity is expected to remain robust.
US initial jobless claims also fell to 197,000 last week, while the four-week moving average declined to 200,000.
These data points indicate that the US labor market remains resilient and could influence expectations regarding the future direction of US Federal Reserve (Fed) interest rates.
Malaysian Economy Remains Strong
On the domestic front, Malaysia's economy expanded by 6.0% in the second quarter of 2026, up from 5.4% in the first quarter.
For the first half of the year, growth reached 5.7%, driven by strong domestic demand and exports. Bank Negara Malaysia (BNM) projects economic growth of around 5% for the full year of 2026.
OPR Remains at 2.75%
BNM maintained the Overnight Policy Rate (OPR) at 2.75% during its September meeting. The next monetary policy meeting is scheduled for November 5, 2026, with the current stance taking into account resilient economic growth and price stability.
**Inflation Rises Slightly**
Malaysia's inflation rose to 1.9% in August, up from 1.8% in July. BNM projects headline inflation to remain within the 1.5% to 2.5% range for 2026, although external cost pressures—including energy prices—continue to pose risks to the domestic price outlook.
**Bond Inflows Support Demand**
Malaysia's bond market also received support from foreign investors, recording net inflows of RM15.9 billion in August, according to RAM Ratings.
Of that total, Malaysian Government Securities (MGS) and Government Investment Issues (GII) recorded net purchases of RM10.6 billion, reflecting strong foreign demand for local fixed-income assets.
**Ringgit Trades Mixed**
Against major currencies, the ringgit strengthened against the euro to 4.5914/4.5987 from 4.6015/4.6066 at Thursday's close.
The ringgit also appreciated against the British pound to 5.3870/5.3956 but depreciated against the Japanese yen to 2.5844/2.5886.
Among ASEAN currencies, the ringgit weakened against the Singapore dollar to 3.1883/3.1936 and the Thai baht to 12.1207/12.1515.
Meanwhile, the ringgit remained unchanged against the Philippine peso at 6.50/6.51 and the Indonesian rupiah at 227.2/227.6. Overall, ringgit movements remain influenced by the strength of US economic data and expectations regarding Fed policy, while Malaysia's economic growth, controlled inflation, and bond investment inflows are among the domestic factors supporting the local currency.
