During the morning trading session, Malaysia’s ringgit continued to climb against most major currencies. Market participants have a very rosy view that the next US tariffs that are to be implemented will not have an impact. The ringgit was firmer at the start today. This increase comes on the heels of predictions that Malaysia will be one of the most insulated countries when the US government’s reciprocal tariff reprisals kick in on April 2.
Further, the ringgit rallied against all regional currencies. In particular it strengthened against the Singapore dollar, advancing to 3.3075/3134 from its previous close of 3.3081/3114. Moreover, it rose slightly against the Indonesian rupiah to 267.5/268.1 versus the previous 267.7/268.0.
“As a result, the local currency appreciated this morning,” said Dr Mohd Afzanizam Abdul Rashid, chief economist at Bank Muamalat Malaysia Bhd. He said this surge was because of forward-looking expectations about tariffs.
"Market participants will scrutinise details of the reciprocal tariffs and how they are going to affect each country’s economy," he stated.
In other currencies, the ringgit strengthened against the Thai baht, rising to 13.0235/0545 from 13.0436/0608 last Friday. In addition, it rose on the British pound, reaching 5.7062/7158 from last Friday’s close of 5.7151/7203.
Against the greenback, the ringgit strengthened to 4.4155/4230 from last Friday’s close of 4.4180/4220. The nascent currency rally intensified against the Japanese yen, moving up to 2.9500/9552 from 2.9574/9602.
Even more astonishing, Malaysia maintains an average tariff rate of a mere 5.6 percent. This rate is much lower than India, Bangladesh and South Korea’s rates, which have the average tariffs of 17.1 percent, 14.1 percent, and 13.4 percent respectively. This puts Malaysia in a very favorable position going into the oncoming US tariffs.
"In that sense, Malaysia could be among the least affected country," Dr Mohd Afzanizam Abdul Rashid remarked.
The ringgit strengthened against the Philippine peso, at 7.70/7.72, improving from 7.70/7.71. It was little changed versus the euro, at 4.7842/7923 compared to 4.7843/7886.
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