BMI Adjusts Ringgit Outlook: Modest Strength to RM4.40 by Year-End After Trump's Win"

KUALA LUMPUR — BMI Research has revised its forecast for the Malaysian ringgit, now predicting a slight strengthening to 4.40 against the US dollar by the end of 2025, down from its earlier estimate of a potential return to RM3.80.

While the ringgit gained 2.7% in 2024, BMI points to challenges ahead, particularly from a higher US terminal rate, which is expected to limit its gains. The currency is projected to fluctuate between 4.80 and 4.20 against the dollar by mid-2025, with a possible longer-term recovery.

Following Donald Trump's victory in the US presidential election, BMI’s US team has raised their 2025 and 2026 rate forecasts to 3.50%, suggesting this will curb the ringgit's appreciation.

However, Malaysia's strong GDP growth projection of 4.7% and a continued current account surplus should provide some support to the ringgit. Risks from a hawkish Fed or stronger-than-expected "Trumpflation" could still constrain its potential gains.

After reaching 4.10 against the dollar last year, the ringgit has lost some momentum, now hovering near 4.50.