Brisk transactions ensure ringgit maintains high global standing
SPI Asset Management managing partner Stephen Innes stated that demand for transactions in ringgit would be driven by Malaysia's strong trading linkages, especially with China, Singapore, and other Southeast Asian economies.
The expanding usage of the ringgit for currency settlements, bilateral agreements, and portfolio inflows into the domestic bond market, coupled with encouraging growth, have sustained demand for the local note.
"This will help to keep the ringgit on the global radar," he told Bernama in an interview on Sunday.
The ringgit strengthened to as high as 4.1990 against the US dollar on May 5, appreciating by about 6.2% from the start of the year, marking its strongest level in 2025. To date, the local note was traded at 4.2475/2525 against the greenback.
Innes was responding to a report by Seasia Stats, which compiled data from the Society for Worldwide Interbank Financial Telecommunication (SWIFT), that listed the ringgit as among the top 20 most influential currencies globally.
Seasia Stats is a social media page and online platform that shares statistics and data visualisations about Southeast Asia, covering a wide range of topics including economics, demographics, culture, health, and technology.
Innes mentioned that trade, especially in high-growth sectors like electronics and semiconductors, palm oil products, and energy, would stimulate demand for the ringgit.
"Malaysia's regional financial integration also plays a significant role in enhancing the ringgit's global presence," he said.
"The growing use of local currency settlement mechanisms, supported by bilateral agreements with Indonesia, Thailand, and China, has increased the operational footprint of the ringgit in cross-border trade. On the investment side, despite cyclical volatility, Malaysia's bond market still attracts portfolio inflows due to its depth and relatively attractive yields," he added.
Innes highlighted that this consistent interest helps sustain demand for the ringgit among global asset allocators.
He also noted that Bank Negara's ongoing efforts to upgrade financial infrastructure and promote digital payment connectivity have improved the ringgit's accessibility and efficiency in international systems.
According to Seasia Stats data, the US dollar continued to dominate international transactions with a 49.68% share, followed by the euro (22.24%), British pound (6.51%), and Japanese yen (4.03%).
The ringgit, along with the Hungarian forint and Thai baht, rounded out the top 20, each accounting for under 0.3% of global usage.
Innes remarked that the ringgit's inclusion may be modest in scale, but it reflects a significant shift in the ringgit's regional relevance.
"While its share of global transactions remains under 0.3%, its presence on the list reflects more than just size - it points to Malaysia's strategic position within global trade and financial networks, particularly in the Asia Pacific.
"The ringgit may not be a reserve powerhouse, but it's increasingly being used where it counts: in trade settlement, capital flows, and regional currency cooperation," he added.
Meanwhile, Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the government's efforts to improve its fiscal position - which reduced the fiscal deficit to 4.5% of gross domestic product (GDP) in the first quarter of 2025 from 5.7% in the same period last year - have supported the ringgit's performance.
Key fiscal measures - including the increase in the sales and service tax (SST) from 6% to 8% on March 1, 2024, and the diesel subsidy rationalisation implemented in June - have helped strengthen government finances. This includes a 30.3% increase in SST collection in the first quarter of 2025 and a reduction in spending on subsidies and social assistance.
"On that note, that helped improve the ringgit as foreign investors were seen as net buyers in our bond markets, especially the Malaysian Government Securities (MGS) and Government Investment Issues (GII).
He noted that Bank Negara's foreign exchange reserves also rose from US$115.5bil in January to US$120bil at the end of June, further supporting the appreciation of the ringgit. - Bernama
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Express
19 minutes ago
- Daily Express
‘Pay-as-you-use' mulled at new affordable housing schemes
Published on: Tuesday, July 22, 2025 Published on: Tue, Jul 22, 2025 By: Bernama Text Size: Prime Minister Anwar Ibrahim (third from left) and housing and local government minister Nga Kor Ming (left) looking at a model of the Rumah Bakat Madani project at its launch in Seberang Jaya, Penang, on Saturday. (Bernama pic) Kuala Lumpur: The Housing and Local Government Ministry is exploring a 'pay-as-you-use' model for maintenance fees in future affordable housing developments, as part of housing sector reforms. Minister Nga Kor Ming said the initiative is part of efforts to elevate the real estate industry and promote more equitable access to housing for all Malaysians. Speaking to reporters at the Kuala Lumpur Architecture Week (KLAW) 2025 Monday, Nga said the Ministry plans to introduce a system which allows residents to pay maintenance fees based on actual usage of shared facilities. 'Under this proposed model, residents will receive access cards that track their monthly usage of shared facilities. We are starting with the Rumah Bakat Madani initiative led by Skyworld Pearlmont in Penang, which features a pay-per-use clubhouse with an infinity pool, pickleball and badminton courts, a children's playground, and gyms,' he said. Nga added that the concept will serve as a reference for future public housing projects. 'This will serve as a reference model for future public housing projects, which may also include vertical schools to provide better access to education for vulnerable communities,' he said. In addition, the ministry plans to engage private sector players to develop Industrialised Building System (IBS) facilities, aiming to expand the use of modular construction methods such as Prefabricated Prefinished Volumetric Construction (PPVC). Nga said this initiative aligns with Malaysia Madani aspirations and the nation's role as President of the UN-Habitat General Assembly, supporting sustainable urban development by reducing construction waste and minimising pollution. Commenting on KLAW 2025, Nga highlighted the importance of architecture in rejuvenating heritage buildings. 'Architectural elements play a vital role in breathing new life into heritage buildings, preserving their cultural significance while integrating modern design,' he said. KLAW 2025 is held as a prelude to the Asean Real Estate Conference (AREC) and Archidex. The series of large-scale events, being held this week at the Malaysia International Trade and Exhibition Centre (Mitec) and Kuala Lumpur Convention Centre (KLCC), is expected to attract over 50,000 foreign visitors, generating an estimated RM2 billion in transactions.
The Star
27 minutes ago
- The Star
Fahmi: Refining needed to prevent public burden
Another update: Fahmi speaking at the weekly press conference in the Parliament building. — Bernama KUALA LUMPUR: The plan to implement targeted subsidies for RON95 petrol has been delayed due to the need for a more detailed review of the mechanism, says Communications Minister Datuk Fahmi Fadzil. He said the government is currently fine-tuning every aspect of the policy to ensure that its implementation will not have an adverse impact on the public. Fahmi said Datuk Seri Anwar Ibrahim had also addressed the matter during the recent government retreat involving MPs. 'The Prime Minister expressed his view that he does not want the implementation of any policy to negatively affect the majority of the rakyat. 'It is this fine-tuning process that has resulted in a slight shift in the timeline,' he told a weekly press conference at Parliament House yesterday. Fahmi, who is also the government spokesman, said several adjustments had already been made to earlier policies to avoid burdening the people. 'That is one of the reasons why, following the implementation of measures such as the diesel subsidy rationalisation and other efforts, we found it necessary to re-examine the subsidy delivery mechanism. 'In the same spirit of minimising impact, even the expansion of the Sales and Service Tax underwent further refinements after it was announced. 'The same approach applies to policies that have yet to be implemented but were previously indicated including the targeted subsidy for RON95,' he added. The rationalisation of the RON95 subsidy was initially expected to be introduced by the middle of this year. Earlier this month, Finance Minister II Datuk Seri Amir Hamzah Azizan said the government was in the final stages of preparing for its implementation. The move is part of broader fiscal reforms aimed at curbing leakages and ensuring high-income groups contribute more fairly to national revenue.
The Star
27 minutes ago
- The Star
Proposal to link Kota Baru to Pasir Mas with ECRL under review
KOTA BARU: The proposal to extend the East Coast Rail Link (ECRL) from Kota Baru to Rantau Panjang is still being studied by the Malaysia Rail Link Sdn Bhd (MRL) and the Transport Ministry. Kelantan Deputy Menteri Besar Datuk Dr Mohamed Fadzli Hassan said the proposal is seen as relevant as the Malaysian and Thai governments have agreed to revive the existing railway line between Pasir Mas and Sungai Golok under Keretapi Tanah Melayu Berhad (KTMB) to reconnect the railway network between the two countries. He said the Kelantan government is proposing that the ECRL line be extended to Rantau Panjang in Pasir Mas from Kota Baru and not to the original line in Tumpat. 'However, it is still under study by MRL and the Transport Ministry to extend the ECRL line from Kota Baru to Rantau Panjang, Pasir Mas,' he said, Bernama reported. He said this when replying to a supplementary question by Mohd Adanan Hassan (PAS-Kelaboran) regarding the state government's efforts to submit a proposal to implement the ECRL to the original alignment, which is Tumpat, at the State Legislative Assembly sitting in Kota Darulnaim Complex yesterday. Earlier, Transport Minister Anthony Loke said his ministry was examining a proposal to extend the ECRL route from Kota Baru to Rantau Panjang, to facilitate the rail network with Thailand. The ECRL project is expected to be fully completed by the end of 2026, and train services for the Kota Baru to Gombak, Selangor route will be operational by January 2027, while the second line from Gombak to Port Klang is expected to be completed a year later.
