The Malaysian ringgit opened higher against the US dollar and major currencies on Tuesday morning, trading at 4.0750 to 4.0805 against the greenback. The appreciation comes as easing global oil prices and shifting geopolitical developments in West Asia improve regional market sentiment.
Oil Price Relief and Middle East Pipeline Updates
Market sentiment received a notable boost following reports that Saudi Arabia began restoring its damaged East-West pipeline while maintaining tanker movements through the Strait of Hormuz. Satellite data indicated that Saudi Arabia shifted oil exports through the vital maritime route following the pipeline shutdown, increasing shipments to about 2.9 million barrels per day compared to approximately 700,000 barrels per day in August.
The stabilization in supply channels triggered a downward adjustment in crude values. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid noted that Brent crude oil prices fell 3.4 per cent to US$100.34 per barrel. Earlier in the week, prices had hovered higher around US$105.68 per barrel while pipeline repair timelines were projected to take several weeks.
Diplomatic Signals and US-Iran Talks
Beyond physical supply adjustments, diplomatic overtures in New York contributed to a more risk-on environment across Asian foreign exchange desks. Financial analysts pointed to international meetings surrounding the United Nations General Assembly as a stabilizing force for emerging market valuations.
The willingness of US President Donald Trump to meet the Iranian President during the United Nations General Assembly suggested potential de-escalation regarding regional conflict. Market sentiment has improved somewhat, leading directly to the appreciation of regional currencies including the ringgit.
Central Bank Pressures: Federal Reserve and Bank of Japan
While immediate commodity pressures receded, traders maintained a cautious watch on global monetary policy shifts. Last Friday, the Bank of Japan raised interest rates by 0.25 per cent to 1.25 per cent, pushing borrowing costs to their highest level in 31 years in its first rate increase since June.
Economists warned that tighter monetary policy in Japan could spur the unwinding of long-standing yen carry trades, heightening currency volatility. Domestically, however, robust local fundamentals offered a strong counterweight. Malaysia recorded a gross domestic product growth of 5.2 per cent last year, followed by 5.7 per cent growth in the first half of 2026.
“This would make normalising the overnight policy rate back to 3.00 per cent the right decision. Plus, Bank Negara Malaysia would be seen building up its policy buffer against potential headwinds in the future.”
Dr Mohd Afzanizam Abdul Rashid, Bank Muamalat Malaysia Bhd
Performance Across Major and ASEAN Baskets
At the opening bell, the local currency showed mixed movements against its primary trading partners. It gained against the euro to 4.6716/6779 from Monday’s close of 4.6783/6834. The ringgit also advanced against the British pound to 5.4475/4548 and strengthened against the Japanese yen to 2.5893/5931.
Within the ASEAN bloc, performance remained divided. The local note slightly increased versus the Singapore dollar to 3.1931/1976 while depreciating against the Thai baht to 12.2593/2822. Meanwhile, it held relatively steady against the Indonesian rupiah at 228.3/228.7 and remained unchanged against the Philippine peso at 6.49/6.50.