The Malaysian ringgit (MYR) has experienced a significant turnaround in 2024. Currently, the U.S. dollar (USD) to MYR exchange rate stands at 4.12, an unusual level for the MYR, which traditionally tends to depreciate against the USD. This recent surge in strength is not attributable to a single factor but is instead the result of a combination of domestic and international developments that have positively influenced the currency. This article will explore the potential drivers behind the MYR’s performance and analyse its implications for the Malaysian economy. USD/MYR stands at 4.12 as of 26 September 2024. Source: Investing.com

Factors contributing to MYR strength

1. U.S. interest rate cuts

One of the most significant external factors influencing the MYR’s performance has been the shift in U.S. monetary policy. The U.S. recently announced its first rate cut in four years, bringing the interest rate down to a range of 4.75%...