# Fed rate hike weakens Malaysian ringgit

> The US Federal Reserve's first rate increase since 2023 pushes the ringgit to its lowest level against the dollar in months.
- Title: Fed rate hike weakens Malaysian ringgit · Malay Mail
- Summary: The US Federal Reserve's first rate increase since 2023 pushes the ringgit to its lowest level against the dollar in months. When the US raises interest…
- Keywords: malaysian ringgit, us dollar, federal reserve, interest rate hike, monetary policy, currency weakness, fomc, emerging markets, asean currencies, us treasury yields, news, world
- Source: Malay Mail — https://malaymail.com/news/money/2026/09/17/malaysian-ringgit-falls-to-4085-versus-us-dollar-after-first-fed-rate-hike-since-2023/235461
- Published: 2026-09-17T09:20:02+00:00
- Read time: 1 min
- Topics: malaysian ringgit, us dollar, federal reserve, interest rate hike, monetary policy, currency weakness, fomc, emerging markets, asean currencies, us treasury yields, news, world
## Fed raises rates for first time since 2023
The US Federal Reserve increased its benchmark interest rate by 25 basis points to 3.75-4.00 per cent, signalling a commitment to tightening monetary policy and fighting inflation.

> The Fed remains committed to tightening monetary policy to achieve price stability.
## Ringgit falls to 4.085 against dollar
The Malaysian ringgit weakened to 4.0855 against the US dollar on Thursday morning, down from 4.0835 on Tuesday, as the greenback strengthened following the Fed's hawkish decision.
## Dollar index hits 100.322 points
The US dollar index surged to 100.322 points as investors moved money into dollar-denominated assets following the Fed's rate increase and hawkish guidance.
## Treasury yields rise sharply
The two-year US Treasury yield climbed 7 basis points to 4.74 per cent, while the ten-year yield rose 2 basis points to 5.02 per cent, making US bonds more attractive to global investors.
## Ringgit gains against other major currencies
While weakening against the dollar, the ringgit strengthened against the euro, yen, and British pound, reflecting the broader dollar rally rather than ringgit strength.
## Mixed performance against ASEAN peers
The ringgit leapt against the Singapore dollar and Thai baht but weakened against the Indonesian rupiah and Philippine peso, showing uneven regional currency movements.
## Economists expect further ringgit weakness
Bank Muamalat Malaysia's chief economist predicted the ringgit would trade between 4.08 and 4.10 against the dollar, with the Fed signalling another quarter-point rate hike later this year.

> The ringgit is expected to trade lower against the US dollar today, possibly around 4.08 to 4.10.
## Key takeaway

When the US raises interest rates, the dollar strengthens and emerging market currencies like the ringgit weaken because investors seek higher returns in US assets.