In a research report titled “Malaysia – Outperformer”, its research department opined that the authorities’ engagement with relevant organisations to encourage repatriation, conversion and hedging of foreign currency proceeds triggered this outperformance.

Moreover, it said underlying fundamentals have also been ringgit-positive including low foreign positioning in Malaysia, high resident offshore positioning, monetary policy divergence with Malaysia’s central bank likely to hike rather than cut in the region, and a continued tourism recovery.

“That said, we note that the ringgit has recovered significantly in a short period and potential reserve rebuilding may moderate further rallies on a relative basis,” it said.

However, it said the US election outcome may also bring some risk to the local currency, particularly harsh tariff actions on China.