Outlook
The Malaysian ringgit has shown constructive momentum, trading near seven-year highs against the US dollar after a move to around 3.98 per USD on January 26, 2026. This strength is underpinned by Bank Negara Malaysia keeping the overnight policy rate at 2.75% and a softer US dollar as markets price in Fed easing. A resilient Malaysian economy and steadier growth from key partners, notably China, support the external backdrop. Markets expect further US rate cuts, which would narrow the rate differential with Malaysia and help sustain the rally in the ringgit. Elevated oil prices around $69 per barrel also aid commodity-linked currencies like the ringgit. Risks to the upbeat view include surprises in US policy timing, a sharper drop in oil prices, or a shift in global risk sentiment that could cap gains.
Key drivers
- Bank Negara Malaysia policy remains supportive, with the OPR at 2.75%, signaling ongoing confidence in domestic stability.
- Markets anticipate US rate cuts, narrowing the interest-rate differential with Malaysia and helping sustain ringgit strength.
- External demand remains a tailwind, with China and other trading partners showing steady activity.
- Oil and commodity price strength continues to support the ringgit as a commodity-linked currency.
- Price action shows broad-based momentum: MYR has traded above its 3-month averages versus several major currencies, consistent with the recent strength.
Range
MYR/USD current 0.2537, 3-month average 0.2446 (3.7% above), range 0.2381 to 0.2552.
MYR/EUR current 0.2140, 3-month average 0.2095 (2.1% above), range 0.2055 to 0.2140.
MYR/GBP current 0.1853, 3-month average 0.1831 (1.2% above), range 0.1811 to 0.1854.
MYR/JPY current 39.26, 3-month average 38.15 (2.9% above), range 36.58 to 39.26.
Brent Crude OIL/USD current 69.09, 3-month average 63.16 (9.4% above), range 59.04 to 69.09.
What could change it
- A material shift in US policy timing or trajectory, especially if Fed rate cuts are delayed or less aggressive than priced in, could widen the USD/MYR differential and weigh on the ringgit.
- Surprise tightening from Bank Negara Malaysia or unexpected domestic developments could curb the current strength.
- A sharper downturn in China or global demand could dampen Malaysia’s external outlook and pressure the ringgit.
- A sharp reversal in oil prices, either toward a sustained drop or extreme volatility, could alter sentiment on commodity currencies.
- Broad shifts in risk appetite or geopolitical developments that trigger risk-off moves could tighten the ringgit’s upside potential.
