The Malaysian ringgit may be poised for gains as higher oil prices and the artificial-intelligence boom provide tailwinds for the currency, strategists say. While the ringgit has declined 1.2% in September, lagging all Asian peers, MUFG Bank expects it to strengthen to 4.03 per dollar by year-end. 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 the energy exporting country, while Malaysia’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 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. Goldman Sachs Group Inc. strategists recommend a long ringgit/baht trade, citing Malaysia’s favorable terms of trade and exposure to AI investment.