Outlook
The MYR is seen with a modest constructive bias into early 2026 as the US dollar remains softer on a backdrop of disappointing/conciliatory rate expectations from the Federal Reserve and Malaysia’s economy showing resilience. Ongoing FDI in technology and green energy, plus a credible fiscal consolidation path, support the currency fundamentals. If the Fed keeps policy accommodative for longer and oil stays firm, further MYR gains are possible. A rebound in US policy hawkishness or a sharp oil retreat could cap or reverse the trend.
Key drivers
US Federal Reserve's rate cuts have weakened the US dollar, supporting the MYR, according to IFCCI. Malaysia's economy grew 5.2% in Q3 2025, driven by domestic consumption, exports and sectors like mining and construction. The government aims to reduce the fiscal deficit to about 3.5% of GDP by 2026, from 3.8% in 2025. Malaysia continues to attract FDI, notably in technology and green energy, which supports the MYR through higher demand for Malaysian goods and services. Oil prices have climbed to 70.26 USD per barrel, a 90-day high, up 10.3% above the 3-month average, contributing to a volatile but supportive backdrop for Malaysia’s export earnings.
Range
MYR/USD is near 0.2554, a 90-day high and 3.6% above its 3-month average of 0.2465, with a 0.2400–0.2554 range.
MYR/EUR trades near 0.2151, about 2.2% above its 3-month average of 0.2105, within a 0.2072–0.2155 range.
MYR/GBP at 0.1875, roughly 2.1% above its 3-month average of 0.1836, within a 0.1813–0.1875 range.
MYR/JPY around 39.13, about 1.6% above its 3-month average of 38.5, trading in a 37.35–39.94 range.
Oil (USD) currently 70.26, within a 59.04–70.26 range, 90-day high and 10.3% above the 3-month average of 63.72.
What could change it
If US monetary policy shifts toward tighter conditions, the dollar could strengthen and constrain MYR gains. A surprise deterioration in Malaysia’s external accounts or fiscal slippage could weigh on sentiment and the currency. A sharp fall in oil prices could reduce Malaysia’s export revenue and pressure the MYR. Conversely, stronger-than-expected continued FDI inflows and sustained fiscal consolidation could keep supporting the MYR. A risk-on environment or improvements in global trade dynamics could also help the MYR outperform.
