Ringgit rebounds to close higher on upbeat Q2 GDP forecast

 BNM’s recent pre‑emptive overnight policy rate cut is likely to support growth in H2 2025, says analyst.

KUALA LUMPUR:

 The ringgit rebounded from recent losses to end higher against the US dollar today, supported by a better-than-expected forecast of Malaysia’s second quarter (Q2) growth, which signalled that the domestic economy remains resilient amid external uncertainties.

Malaysia’s economy is forecast to grow by 4.5% in Q2 2025 based on the advance gross domestic product (GDP) estimates, slightly outpacing the previous quarter’s 4.4%.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the recent pre‑emptive overnight policy rate cut by Bank Negara Malaysia (BNM) would likely support growth in the second half (H2), especially as downside risks have increased.

“The ringgit appeared to have gained some strength today, improving 0.13% against the US dollar,” he noted.

The Q2 growth was driven by robust domestic demand, with the growth momentum sustained in April and May, with a stronger performance anticipated in June, according to the statistics department’s advance forecast today.

At 6pm, the local currency rose to 4.2410/4.2455 from 4.2465/4.2510 at yesterday’s close.

The ringgit traded mostly easier against a basket of major currencies.

It improved against the Japanese yen to 2.8517/2.8549 from 2.8548/2.8580 at yesterday’s close, but eased versus the euro to 4.9336/4.9388 from 4.9217/4.9269 and retreated against the British pound to 5.6999/5.7060 from 5.6886/5.6946.

The local currency trended mostly lower against Asean currencies.

It slipped against the Indonesian rupiah to 260.2/260.6 compared with yesterday’s 259.8/260.2, fell against the Thai baht to 13.3027/13.3065 from 13.0521/13.0720 and traded down vis-à-vis the Singapore dollar to 3.3027/3.3065 from 3.3013/3.3051.

It was traded flat versus the Philippine peso at 7.41/7.43 from 7.41/7.43. - FMT