KUALA LUMPUR — The ringgit recorded an overall appreciation of 2.7% against the US dollar in 2024, standing out as one of the few Asian currencies to strengthen versus the greenback, said Bank Negara Malaysia (BNM).
The local note similarly appreciated against other major currencies throughout the year, including the Singapore dollar, the Korean won, and the Japanese yen, with an overall appreciation recorded against Malaysia’s major trade partners (nominal effective exchange rate (NEER) for 2024: 7.5%).
“This was despite the ringgit’s depreciation against the US dollar (-8.1%) and major trading partners (NEER: -3.4%) in the fourth quarter of 2024 (4Q 2024), which was in line with the broader movement of regional currencies.
“This movement was primarily driven by a stronger US dollar amid revised financial market expectations for smaller United States (US) policy rate reductions in 2025, and higher investors’ risk aversion arising from policy uncertainties under the new US administration,” BNM said in a statement today.
On a year-to-date basis, as of Feb 12, 2025, the ringgit appreciated by 0.1% against the US dollar and depreciated by 0.03% on a NEER basis against Malaysia’s major trading partners.
The central bank noted that external factors are expected to continue influencing the ringgit exchange rate.
“Despite that, Malaysia’s positive macroeconomic prospects and the ongoing implementation of structural reforms will provide medium-term support for the ringgit.
“Hence, BNM remains committed to ensuring the orderly functioning of the domestic foreign exchange market,” it added.
As for the higher credit growth performance, BNM said it was driven by growth in business loans and corporate bonds.
It said credit to the private non-financial sector grew by 5.2 per cent in the 4Q 2024 (3Q 2024: 4.8%) amid higher growth in outstanding business loans and corporate bonds.
“The higher growth in business loans was attributed to loans for investment-related purposes. Growth for working capital loans was broadly steady.
“Across business sectors, stronger growth was recorded in the manufacturing and construction sectors,” it said.
Meanwhile, household loans expanded by 5.9% during the quarter (3Q 2024: 6.1%), following some moderation in loan growth for the purchase of housing and cars.
Notwithstanding, the levels of loan applications and disbursements remained broadly sustained for the quarter, said the central bank. – February 14, 2025