‘Ringgit’ Under Pressure! Global Trade Volatility Pushes Central Bank Toward Rate Cut

‘Ringgit’ Under Pressure! Global Trade Volatility Pushes Central Bank Toward Rate Cut

The Malaysian ringgit, which was the strongest currency in Asia last year, is now showing signs of weakening amid rising trade tensions. The U.S. has imposed new import tariffs on Chinese goods, impacting Malaysia’s economy and potentially forcing Bank Negara Malaysia to cut interest rates by 0.25%.

Analysts from Credit Agricole and Malayan Banking Bhd predict that the ringgit could drop to 4.6 per USD by the end of June. Currently, the currency stands at 4.4350 per USD, having strengthened 0.3% in early trading today.

📌 Key Factors Pressuring the Ringgit
1.Trade War
The U.S. has imposed tariffs on Chinese imports, affecting Malaysia’s key trading partner and putting pressure on the economy and currency.
2.Trump’s Semiconductor Tariffs
The U.S. import tax on semiconductors could hurt Malaysia’s exports, as the U.S. is the country’s third-largest semiconductor export market.

However, analysts from Maybank believe that if the U.S. Federal Reserve (Fed) cuts interest rates as expected, it could support the ringgit to strengthen back to 4.35 per USD by the end of the year. Since the beginning of this year, the ringgit has appreciated by approximately 0.6% against the dollar.