Ringgit Drops at Start of 2025 Amid Fed Rate Cut Concerns
By Loshinniy Nair S.Baskaran,
2nd January 2025: The ringgit began 2025 on a weaker note, slipping against major currencies due to concerns over potential interest rate cuts by the US Federal Reserve. At the market’s opening, the ringgit was trading at 4.55 against the US dollar, down from its previous close of 4.52.
Market analysts attribute the decline to ongoing speculation about the Federal Reserve’s next move on interest rates. While rate cuts could signal a slowing US economy, they also strengthen the US dollar, placing pressure on emerging market currencies like the ringgit.
The ringgit also weakened against regional currencies, including the Singapore dollar and the Thai baht. Traders noted that subdued demand for the ringgit, coupled with external uncertainties, contributed to the decline.
Despite the soft start, economic experts remain cautiously optimistic about Malaysia’s economic recovery in 2025, supported by strong trade performance and domestic demand. Bank Negara Malaysia is expected to monitor the situation and implement measures if necessary to stabilize the currency.
The market remains focused on global economic developments, particularly in the US and China, which heavily influence the performance of Asian currencies. Investors are advised to stay alert for further updates on monetary policies and trade data, as stated in The Star.
About Author
