Ringgit Poised for Gains on Oil Prices and AI Boom

The Malaysian ringgit may see gains due to higher oil prices and the AI boom, according to strategists. While it has declined 1.2% in September, MUFG Bank expects it to strengthen to 4.03 per dollar by year-end, while Sumitomo Mitsui Banking Corp sees it at 4.0. The ringgit closed 0.3% higher at 4.0738 per dollar on Friday.

A renewed climb in oil prices may bolster revenues for Malaysia, which is an energy exporting country. Additionally, the country's growing role in the AI supply chain gives it exposure to rising demand for semiconductors. With the political risk premium around some state elections also fading, strategists expect the ringgit to resume its advance.

Malaysia's exports have surged more than 35% in each of the five months through August, boosted by shipments of electronic products including semiconductors. The country is now one of the world's four largest net exporters of AI-related hardware, alongside South Korea, Taiwan and Thailand, according to the International Monetary Fund.