Outlook
The Fed’s rate cuts have weakened the US dollar, a trend expected to extend into 2026 and support the MYR (markets). Malaysia’s economy posted about 5.1% GDP growth in 2025, underscoring resilience that helps external stability and investor sentiment. A widening trade surplus from electronics and commodity exports (oil and palm oil), together with higher foreign direct investment inflows into technology and green energy, reinforce the positive backdrop for the ringgit. The overall tone remains constructive, but MYR will still be sensitive to shifts in US monetary policy, oil price moves, and global demand for Malaysia’s exports.
Key drivers
- US Federal Reserve rate cuts and a softer dollar support EM currencies, including the MYR. (markets)
- Malaysia’s resilient economy, with robust growth in 2025, underpins investor confidence.
- Trade surplus and strong exports in electronics and commodities provide external support for the MYR.
- Higher FDI inflows, especially into technology and green energy, boost demand for the MYR.
- Oil price trends matter for Malaysia’s external sector; crude around mid-$60s per barrel supports export receipts.
Range
MYR/USD: 0.2364–0.2472
MYR/EUR: 0.2035–0.2127
MYR/GBP: 0.1770–0.1847
MYR/JPY: 35.92–39.22
Brent Crude OIL/USD: 59.04–66.18
What could change it
- A less accommodating vs more aggressive Fed path (faster rate cuts or unexpected hikes) could shift USD strength and temper MYR gains.
- A deterioration in Malaysia’s external accounts or a slowdown in export demand could weigh on the MYR.
- A sharp fall in commodity prices (oil, palm oil) or weaker global commodity demand could reduce external support.
- Significant changes in FDI flows or domestic policy developments could alter investor sentiment.
- Heightened global risk aversion or geopolitical shocks could drive the MYR lower despite underlying fundamentals.
