Global asset manager Manulife Investment Management (Manulife IM) believes that the ringgit outlook will improve in the 2H of 2025. The US dollar’s continuous decline and gains in Asian markets are the sources of this optimism. The company, which is well-established in regional economies, stressed its strong support for the currency. It stated that additional support will come from capital inflows into emerging markets.
Furthermore, monetary easing by Asian central banks is expected to provide additional support. Manulife provided a mid-year regional market outlook for 2025 to senior executives from its equity, fixed income, and multi-asset teams.
Ringgit Outlook Brightens as Asia Attracts Global Flows
Manulife IM Asia Head of Asia ex-Japan Fixed Income, Murray Collis, noted that interest rates are falling in Asian markets. As a result of this trend, investment is moving away from the US dollar. He believes that in 2H2025, the Fed will lower interest rates, which would make the US dollar even less appealing. Thus, this creates an advantageous situation for Malaysia’s currency to appreciate.
Additionally, the ringgit outlook is positively impacted by the general market momentum. Malaysia continues to benefit greatly from the steady flow of capital from the US dollar into regional currencies. Furthermore, analysts anticipate that this change will likely accelerate by the end of the year.
Manulife IM Global Head of Multi-Asset Solutions Luke Browne added that the ringgit’s strength is also influenced by another factor. That is the macroeconomic environment that is stable in Malaysia. If the US dollar keeps declining, a possible rally might last until Q1 2026.
Malaysia Faces Challenges, but FDI Keeps Rising
Manulife’s Head of Emerging Market Equities, Charlie Dutton, emphasized geopolitical risks in spite of the generally positive outlook. He claimed that US tariff threats under a Trump administration and Malaysia’s participation in the BRICS could make trade dynamics more difficult.
Dutton is still optimistic that Malaysia can handle this challenging situation, though. A solid economic base is indicated by steady increases in foreign direct investment and consumer spending. He believes that both industrial and retail activity will contribute to Malaysia’s GDP recovery in late 2025.
Ringgit May Stay Strong Despite Global Pressures
The ringgit’s outlook appears optimistic, but global risks remain. Growing Asian markets, strong FDI, and a falling US dollar all contribute to currency strength. However, Malaysia must navigate geopolitical challenges as it moves forward.
The Federal Reserve’s and regional banks’ rate decisions will also impact short-term currency fluctuations. Meanwhile, domestic consumption patterns in Malaysia might be a big help in keeping the momentum going.
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