After Malaysia's ruling coalition won a tightly-fought election on Monday, analysts are turning bullish on the country's currency, expecting the ringgit to strengthen together with the rest of the economy in the months ahead.
News of the election result pushed both the Southeast Asian economy's currency and stock market to record highs. Malaysia's KLCI Index surged 7 percent to an historic high of over 1,700 in early Asian trade on Monday, while the ringgit strengthened half a percent against the dollar to 2.9870 – levels not seen since September 2011.
"It [the election result] allows the market to come out and buy the ringgit again. We like what is happening in the economy," said Patrick Bennett, executive director and forex strategist at the Canadian Imperial Bank of Commerce.
"If you look at the growth of the economy, it grew 5.6 percent last year and compare it to somewhere like Singapore, which is struggling to grow at all, there is some very good pick-up in Malaysia from these levels," added Bennett, referring to Singapore's 1.2 percent gross domestic product (GDP) growth in 2012. The resource-rich Malaysian economy is expected to grow at the same pace in 2013, according to majority estimates.
(Read More: Malaysia Stocks Hit Record High After Elections)