Outlook
The MYR is seen staying supported in the near term, supported by resilient Q4 2025 data, ongoing tech-investment tied to the China Plus One theme, fiscal consolidation, and Bank Negara Malaysia’s hold at 2.75%. The currency is trading above its 3-month averages against USD, EUR, GBP, and JPY, with oil-market strength adding a constructive backdrop for export receipts. External risks include further shifts in global rate expectations and oil-price volatility, which could cap gains or trigger pullbacks.
Key drivers
- Robust Q4 2025 growth, with the construction sector expanding 10.3% year-on-year, underpinning overall demand for Malaysian assets.
- China Plus One strategy boosting tech investments in Malaysia (notably Penang), increasing demand for the MYR.
- Fiscal consolidation and improving investor confidence reducing deficits and supporting sentiment toward the currency.
- Bank Negara Malaysia holding the overnight policy rate at 2.75% while other major central banks cut, narrowing rate differentials and supporting the MYR.
- Oil price strength, with OIL around 71.61 USD/bbl (90-day high), up about 11.5% versus the 3-month avg and trading in a wide range, which benefits Malaysia’s exporters and MYR but adds inflation risk.
Range
MYR/USD 0.2562; 3-month average 0.248; range 0.2400–0.2564. MYR/EUR 0.2173; 3-month average 0.2113; range 0.2072–0.2176. MYR/GBP 0.1901; 3-month average 0.1842; range 0.1813–0.1901. MYR/JPY 39.71; 3-month average 38.69; range 37.56–39.94. Brent Crude OIL/USD 71.61; 3-month average 64.24; range 59.04–71.61.
What could change it
- A material shift in oil prices (sustained rise or drop) could push the MYR higher or lower, given Malaysia’s energy exposure.
- Unexpected Bank Negara Malaysia policy moves (hike or cut) or a change in global rate differentials altering capital flows.
- A meaningful shift in domestic data or investment trends (positive or negative) affecting confidence and inflows.
- Global risk sentiment shifts, with stronger risk appetite supporting EM assets or risk-off flows weighing on the MYR.
