USD/MYR holds near one-week low on China stimulus

Key moments

• Ringgit gains, hits one-week high against US Dollar
• Sentiment boosted by China stimulus announcement, US tariff reprieve on autos
• Central Bank of Malaysia keeps policy rate on hold for 11th straight meeting

Malaysia’s Ringgit tracked gains in other Asian currencies on Thursday, while holding near a fresh one-week high against the US Dollar, after China unveiled more fiscal stimulus.

In the meantime, the Central Bank of Malaysia left borrowing costs without change for an 11th straight policy meeting in March, in line with market consensus.

Yesterday, China, a key trading partner to Southeast Asian nations, bolstered its fiscal stimulus and pledged more initiatives to spur consumption and cushion the economic impact of an escalating trade war with the United States.

Market sentiment was also supported by the Trump administration’s decision to grant a one-month tariff reprieve on automobile imports from Mexico and Canada. The White House announced on Wednesday it would exempt auto makers from the 25% tariffs imposed on Canada and Mexico for one month as long as they remain compliant with existing free trade rules.

On the monetary front, the Central Bank of Malaysia maintained its benchmark interest rate at 3% on Thursday, as the decision reflected the ongoing economic growth support and was consistent with the current inflation prospect evaluation.

Annual inflation rate in the country has remained stable at 1.7% in January, an 11-month low. Inflation will likely remain under control this year due to the lack of significant domestic demand pressures.

Malaysia’s GDP grew 5.1% in 2024, mostly driven by stronger domestic demand and a recovery in exports. The 2025 outlook remains optimistic despite persisting global uncertainty.

The USD/MYR currency pair was last down 0.08% on the day to trade at 4.4235. The exotic Forex pair earlier registered an intraday low of 4.4100, or its lowest level since February 26th.