The market bias for MYR against USD is currently bullish.
Key drivers include the anticipated narrowing of interest rate differentials due to expected rate cuts by the Federal Reserve in 2026. Malaysia's strong economic fundamentals, driven by robust GDP growth and fiscal reforms, are also supporting the MYR's appreciation. Furthermore, the Malaysian Ringgit may benefit from global efforts to de-dollarize, positioning Malaysia to attract more investments.
In the near term, MYR exchange rates are expected to trade within a stable range above current levels. The Ringgit is currently 2.3% above its three-month average, showing strength despite the fluctuations in oil prices.
An upside risk could arise from a quicker-than-expected recovery in global commodity prices, boosting Malaysia's economy. On the downside, renewed tensions in global markets or delays in Malaysia’s fiscal reforms could negatively impact the MYR.
