KUALA LUMPUR: Malaysia’s growing ringgit-denominated transactions are cementing its status as one of the world’s top 20 currencies, driven by strong regional trade linkages and rising investor interest, a leading asset management executive said.
SPI Asset Management Managing Partner, Stephen Innes, said the ringgit’s increasing role in regional settlements and investment flows is keeping the currency on the global radar, particularly as Malaysia deepens trade ties with China, Singapore, and other Southeast Asian economies.
“Expanding use of the ringgit in currency settlements, bilateral deals and portfolio flows into Malaysia’s bond market have all helped sustain demand,” Innes told BERNAMA.
The ringgit hit a year-high of 4.1990 against the US dollar on May 5, appreciating 6.2 per cent year-to-date. As of today, it trades at 4.2475/2525.
Innes was commenting on data compiled by Seasia Stats – which sources from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) – showing the ringgit ranked among the world’s top 20 most-used currencies.
While the ringgit’s global share remains below 0.3 per cent, Innes said its inclusion reflects Malaysia’s strategic role in regional trade and financial flows.
“The ringgit may not be a reserve powerhouse, but it’s being used where it matters – in trade settlement, capital flows, and regional currency cooperation,” he said.
Trade in high-growth sectors such as electronics, semiconductors, palm oil, and energy continues to support
ringgit demand. Innes also highlighted Malaysia’s regional financial integration – including bilateral currency settlement mechanisms with Indonesia, Thailand and China – as key to expanding the ringgit’s international footprint.
“Despite market volatility, Malaysia’s bond market still attracts inflows due to its depth and relatively attractive yields,” he added. “This keeps the ringgit relevant for global asset managers.”
He also noted that Bank Negara Malaysia’s efforts to modernise financial infrastructure and expand digital payment connectivity have improved the ringgit’s accessibility in global systems.
According to Seasia Stats, the US dollar continues to dominate with a 49.68 per cent share of international transactions, followed by the euro (22.24 per cent), British pound (6.51 per cent), and Japanese yen (4.03 per cent).
The ringgit joins currencies like the Hungarian forint and Thai baht at the bottom of the top 20, each representing under 0.3 per cent.
Meanwhile, Bank Muamalat Malaysia Bhd’s Chief Economist, Dr Mohd Afzanizam Abdul Rashid, said the ringgit’s performance has also been underpinned by Malaysia’s improving fiscal position.
In the first quarter of 2025, the country’s fiscal deficit narrowed to 4.5 per cent of GDP from 5.7 per cent a year earlier – supported by key measures including the increase of the sales and service tax (SST) from six per cent to eight per cent in March 2024, and the diesel subsidy rationalisation in June.
“These measures strengthened public finances,” he said, noting a 30.3 per cent jump in SST collection and reduced spending on subsidies and social assistance.
“Foreign investors have returned as net buyers in the bond market, particularly in Malaysian Government Securities (MGS) and Government Investment Issues (GII),” he added.
BNM’s foreign reserves also rose from US$115.5 billion in January to US$120 billion at the end of June, further supporting the ringgit’s upward trajectory. – BERNAMA
