KUALA LUMPUR, Jan. 26 (Xinhua) -- The Malaysian ringgit has breached the psychological level of 4.00 against the U.S. dollars, reaching its highest level since 2018.
According to the Bank Negara Malaysia, the ringgit hit 3.98 against the U.S. dollar as of 9 a.m. on Monday.
UOB Global Economics and Markets Research said in a note on Monday that the ringgit remains the best-performing currency in Asia in 2026, with a year-to-date gain of 1.3 percent.
Meanwhile, Public Investment Bank Research said the stronger ringgit was driven by Bank Negara Malaysia's decision to maintain the benchmark overnight policy rate at 2.75 percent and a weakening U.S. dollar.
"We have highlighted our view that the ringgit could strengthen below MYR 4.00 on the back of a structural decline in the purchasing power of the U.S. dollar, given high U.S. government debt, excessive liquidity from rate cut and money printing by the U.S. Federal Reserve as well as the erosion of confidence in the reserve currency as a safe-haven asset," the research house said in note on Monday.
It added that geopolitical tensions continued to disrupt the U.S. Treasuries market with the fear of a potential selling pressure coming from the European investors.
OCBC Bank, on the other hand, said in a note on Monday that Malaysia's fundamentals remain encouraging, supported by quality foreign direct investment inflows, upbeat growth, a wider trade surplus and a clear commitment to fiscal consolidation.
"These factors can help to enhance foreign investor confidence and improve prospects for portfolio inflows," said the bank.
It added that Malaysian policymakers' constructive messaging, including earlier comments that USD/MYR could trade "just below 4" by mid-2026, has also contributed to more positive sentiment.
"This has already played out, and external conditions remain supportive," it noted. ■
