Malaysian Ringgit Gains Amid Geopolitical Shifts and Oil Volatility

The Malaysian ringgit experienced a volatile but generally positive trend between September 21 and September 22, 2026. The currency initially opened lower on Monday, easing to 4.0810/0865 against the US dollar following a Bank of Japan interest rate hike to 1.25 per cent, the highest in 31 years. This move sparked concerns over the unwinding of the yen carry trade, while rising crude oil prices threatened to keep inflation high.

Sentiment shifted later on Monday and into Tuesday as the ringgit climbed to close at 4.0730/4.0775 against the US dollar. This appreciation was driven by diplomatic optimism surrounding US President Donald Trump's willingness to meet Iranian President Masoud Pezeshkian during the United Nations General Assembly. Additionally, Brent crude oil prices dropped 3.4% to US$100.34 per barrel after the Government of Saudi Arabia shifted exports to the Strait of Hormuz following an East-West pipeline shutdown, increasing flows to 2.9 million barrels per day.

Despite these gains, investors remained cautious. The ringgit showed mixed performance against ASEAN peers and faced pressure from tight monetary policies maintained by the United States Federal Reserve, the European Central Bank, and the Bank of Japan. Market participants continue to monitor upcoming geopolitical events, including a scheduled meeting between Donald Trump and Chinese President Xi Jinping on Thursday.