A strengthening ringgit has reached its best level in almost five years, offering tangible benefits for Malaysians at home and abroad as the currency regains ground against the US dollar.
In a welcome Christmas gift for Malaysians, the ringgit closed stronger against the US dollar on December 26, touching 4.0355, marking its highest level since early 2021. The move reflects shifting expectations around US monetary policy and comes after several challenging years in which the local currency struggled near historic lows, particularly against the greenback.
The latest gain was driven by weaker-than-expected US consumer confidence data. According to the Conference Board, US consumer confidence fell to 89.1 points in December from 92.9 in November, undershooting market expectations of 91.7. Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the figures suggest the US Federal Reserve could pivot more decisively towards monetary easing in 2026, potentially cutting rates by more than 25 basis points.
The shift in sentiment weighed on the US Dollar Index, which slipped 0.08 percent to 97.863 points, providing further support for emerging market currencies, including the ringgit. By 6.00pm, the local currency was trading at 4.0425/4.0515 against the dollar, up from 4.0615/4.0665 at the previous close.
The ringgit’s recent performance marks a notable reversal from its weakness over the past five years. Between 2022 and 2024, the currency repeatedly tested levels above 4.60 against the dollar, with periods in 2024 seeing it approach the 4.70 mark amid aggressive US rate hikes and global risk aversion. During the pandemic years, the ringgit also traded above 4.40, eroding overseas purchasing power for Malaysian consumers and travellers.
Against that backdrop, the current levels represent meaningful relief. A stronger ringgit directly reduces costs for Malaysians travelling abroad, from airfares priced in US dollars to accommodation, shopping, and daily expenses. For students, frequent travellers, and businesses with foreign currency exposure, even modest moves can translate into significant savings.
The local currency also ended the day stronger against a basket of major global currencies. It appreciated versus the euro to 4.7697/4.7804, strengthened against the British pound to 5.4647/5.4768, and edged higher against the Japanese yen to 2.5940/2.5999. Gains were also recorded against regional peers, including the Thai baht, Indonesian rupiah, Philippine peso, and Singapore dollar.
For Malaysians planning regional travel or longer-haul trips in early 2026, the timing is favourable. A firmer ringgit enhances spending power at a time when international travel demand is recovering strongly and airlines are expanding capacity across Asia and beyond. It also provides some insulation against global inflation pressures that previously compounded the cost of overseas travel.
On the domestic front, Bursa Malaysia confirmed that the exchange and its subsidiaries will be closed on December 25, 2025, for Christmas Day and on January 1, 2026, for New Year’s Day, resuming operations on the following business days. Bursa Gold Dinar and Bursa Suq Al-Sila will remain open during the public holidays.
While currency markets remain volatile and subject to external shocks, the ringgit’s latest milestone underscores a clear improvement in sentiment. After years of weakness, the renewed strength offers a timely boost for Malaysian consumers, particularly those looking outward as global travel and spending pick up pace.
SOURCES: Free Malaysia Today; Bernama; Conference Board; Bank Negara Malaysia
