Outlook
The Malaysian Ringgit is showing resilience in early 2026 as the US dollar weakens on rate-cut expectations, and Malaysia's economy strengthens. Growth in Q3 2025 at 5.2% supports domestic demand and exports, while fiscal consolidation aims for a 3.5% deficit of GDP by 2026. Sustained FDI inflows in technology and green energy bolster external demand, and firmer oil prices help energy exporters. In the near term, the MYR could extend gains if the dollar remains soft, but it remains sensitive to shifts in US policy and oil-price moves.
Key drivers
- US Federal Reserve's rate cuts have weakened the US dollar, providing headroom for the MYR to strengthen.
- Malaysia's economy expanded 5.2% in Q3 2025, supported by domestic consumption and exports.
- Fiscal consolidation aims to reduce the deficit to 3.5% of GDP by 2026, improving financial stability.
- Continued FDI inflows, particularly in technology and green energy, support external demand for the MYR.
- Oil price movements: Oil at 68.86 USD, about 8.7% above its 3-month average, supports energy exporters and overall risk sentiment.
Range
MYR/USD around 0.2532 (7-day lows), 3-month average 0.2456, trading range 0.2395–0.2552.
MYR/EUR around 0.2150, 3-month average 0.21, trading range 0.2070–0.2155.
MYR/GBP around 0.1872, 3-month average 0.1834, trading range 0.1813–0.1873.
MYR/JPY around 39.68, 3-month average 38.34, trading range 36.74–39.91.
Brent Crude OIL/USD around 68.86, 3-month average 63.37, trading range 59.04–69.09.
What could change it
- A stronger-than-expected US dollar due to hawkish Fed messaging or data would limit MYR gains.
- Domestic data surprises or higher fiscal deficits could weigh on the currency.
- A sharp fall in oil prices or a downgrade in Malaysia's energy outlook could dampen MYR strength.
- Increased global risk-off sentiment or geopolitical tensions could push the MYR lower.
- A sustained improvement in FDI inflows or a more favorable external balance could support the upside.
