Malaysian Ringgit Recovers After US Interest Rate Hike

The Malaysian ringgit experienced significant volatility between September 17 and 18, 2026, initially dropping against the US dollar before recovering. The currency opened lower on Thursday following a hawkish decision by the Federal Open Market Committee to raise the benchmark interest rate by 25 basis points to a range of 3.75 percent to 4.00 percent. This marked the first such hike since 2023 and exceeded market forecasts, strengthening the US dollar and pushing the ringgit to close at 4.0965/4.1010.

By Friday, the ringgit reversed this trend, closing stronger at 4.0795/4.0840. This recovery was driven by easing global oil prices after the Government of Saudi Arabia began restoring its damaged East-West pipeline and offered additional crude cargoes through Oman. Brent crude fell 0.95 percent to US$104.82 per barrel as supply concerns diminished.

During this period, Federal Reserve Chair Kevin Warsh reaffirmed the central bank's independence and signaled further rate hikes, despite pressure from President Donald Trump to lower borrowing costs. Market participants also remained cautious regarding an anticipated 25-basis-point rate increase from the Bank of Japan.