Ringgit strengthens after strong Malaysian GDP data — What it could mean for Singapore

MALAYSIA: The Malaysian ringgit ended higher against the US dollar on Monday, after Malaysia reported stronger-than-expected economic growth last week with its gross domestic product (GDP) announcement.

By 6 p.m., the ringgit rose to 3.8945/3.9055 against the greenback, compared with 3.9060/3.9115 on Friday’s close.

While the move is not huge, it comes on the back of better growth numbers and changing expectations around US interest rates. Both of these factors could eventually matter for Singapore down the line.

Malaysia’s economy holding up

Chief economist Afzanizam Abdul Rashid from Bank Muamalat Malaysia Bhd said Malaysia’s official 2026 growth forecast of 4.0% to 4.5% may be revised upwards.

“This would mean that the overnight policy rate (OPR) would be kept steady in 2026 as there is no urgency to overstimulate the economy,” he told Bernama.

If growth remains strong, Malaysia may not need to cut interest rates to support the economy. Keeping rates steady can help support the ringgit.

At the same time, inflation in the United States has been easing, as shown by the moderation of the US consumer price index inflation in January. This has raised expectations that the Federal Reserve could cut interest rates in the second half of 2026. If US rates fall while Malaysia’s rates stay unchanged, the ringgit could strengthen further.

Slightly stronger against the Singapore dollar

The ringgit also improved slightly against the Singapore dollar, strengthening to 3.0860/3.0949. On Friday’s close, the ringgit was valued at 3.0904/3.0950, which is a small change, but an improvement regardless.

If the ringgit continues to gain strength, it could slowly affect how much Singaporeans get when exchanging money. For many Singapore residents, this impact may be felt by those who regularly cross the Causeway. The strengthening ringgit could affect those heading to Johor Bahru for shopping, food, or petrol because a stronger ringgit means the Singapore dollar does not stretch as far. Consequently, this would end up making things in Malaysia feel a bit more expensive.

For businesses, the impact goes beyond shopping trips; Malaysia is one of Singapore’s closest trading partners, so if Malaysia’s economy grows stronger, it can benefit Singapore companies with operations there.

At the same time, exchange rate changes can affect profits, especially for firms that earn in ringgit but pay costs in Singapore dollars.

The latest rise in the ringgit is not dramatic, but it reflects stronger growth in Malaysia and possible changes in US interest rates. Because Singapore and Malaysia are closely linked, through trade, business and daily cross-border travel, even small currency shifts are closely watched. If the ringgit continues to strengthen, the effects could become more noticeable over time.

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