Outlook
The Malaysian Ringgit is expected to remain supported in the near term as the US dollar softens on the back of ongoing Federal Reserve rate cuts, and Malaysia benefits from a resilient economy, a healthy trade balance, and steady inward investment. With GDP growth strong in 2025 and a widening trade surplus driven by electronics and commodity exports, the MYR is set up for a positive bias through 2026. Oil price momentum adds a further macro tailwind, given Malaysia’s commodity links. Nonetheless, the pace and durability of gains will hinge on external risk factors such as oil price swings, global growth trajectories, and shifts in risk appetite.
Key drivers
- US Federal Reserve policy: rate cuts have weakened the dollar, supporting EM currencies including the MYR. Markets expect easing to continue, which should help the MYR against the USD.
- Malaysia’s domestic resilience: 2025 GDP growth near 5.1% underscores solid domestic demand and investor confidence.
- Trade balance and commodities: a widening trade surplus from electronics exports and oil/palm oil supports the MYR.
- Foreign direct investment: higher inflows, especially into technology and green energy, lift demand for the MYR.
- Oil price backdrop: oil at 66.20 USD per barrel (90-day high; up 5.1% vs. the 3-month average) provides favorable external financing conditions for Malaysia and can bolster export receipts.
Range
MYR to USD is around 0.2497, near 90-day highs, and sits 2.6% above its 3-month average of 0.2434; the 90-day range has been roughly 0.2367–0.2497. MYR to EUR is about 0.2111, 1.1% above its 3-month average of 0.2089, with a 4.5% range from 0.2035 to 0.2127. MYR to GBP is near 0.1830, close to its 3-month average, within a 3.9% range from 0.1777 to 0.1847. MYR to JPY is around 38.87, 2.4% above its 3-month average of 37.95, in a fairly volatile 8.4% range from 36.18 to 39.22. Oil price (Oil to USD) is at 66.20, within a 90-day range of 59.04 to 66.20, about 5.1% above the 3-month average of 62.99.
What could change it
- Fed policy shifts: faster or later-than-expected rate cuts, or a rebound in US yields, could alter USD strength and push the MYR in the opposite direction.
- Domestic data surprises: stronger or weaker than projected Malaysian growth, export performance, or investment flows could shift risk sentiment toward or away from the MYR.
- Oil price volatility: sustained moves higher or lower in oil could affect Malaysia’s external position and the currency’s level.
- Global risk sentiment: adverse developments or a spike in risk aversion could pressure EM currencies, including the MYR, despite domestic positives.
