Ringgit slips before Fed meeting

Why does that matter? Because the Fed is still the single biggest driver of global liquidity. If policymakers sound more committed to keeping rates elevated, the dollar can regain support, borrowing costs can stay tighter for longer and pressure can build on currencies such as the ringgit. If the message leans more dovish, the opposite is true: the dollar tends to soften, capital becomes a bit more comfortable moving into higher-yielding or growth-linked markets, and Asian currencies often catch a bid.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Abdul Rashid said traders were recalibrating expectations for next week’s FOMC decision, with the real focus on whether the statement offers clues about a possible rate hike in December. His call that the dollar-ringgit pair may stay in a narrow range reflects the market’s current posture: not a strong directional bet, but a wait-and-see stance before the Fed provides more clarity.

The ringgit’s weakness against the dollar also came even as it traded firmer against several regional peers, a sign that this was less about a broad deterioration in Malaysia’s outlook and more about dollar-specific caution. The currency strengthened versus the Thai baht, Indonesian rupiah and Philippine peso, but slipped against the Japanese yen, British pound, euro and Singapore dollar.

For long-term investors, this is the kind of move that matters less day to day than in the context of where the Fed goes next and how Malaysia’s fundamentals hold up. A stronger ringgit usually helps imported inflation and can ease pressure on companies with dollar-denominated costs, while a softer ringgit can support exporters and the local earnings of multinational firms. The broader investment story still hinges on whether Malaysia can continue to benefit from healthy exports, steady domestic growth and a less hostile global rate backdrop.

In the near term, though, the message is simple: the ringgit is likely to remain range-bound until the Fed speaks. That makes this more of a positioning story than a crisis story, and patient investors should treat the currency move as a checkpoint, not a thesis breaker.