Ringgit appreciated 0.5% in October 2025, outperforming regional peers as US monetary easing hopes and reduced tariff risks boosted sentiment.
KUALA LUMPUR: Malaysia’s financial markets in October 2025 were shaped by expectations of US monetary policy easing and reduced tariff-related uncertainties.
Bank Negara Malaysia said global markets were largely driven by anticipation of a Federal Reserve rate cut, which was delivered at month’s end.
The ringgit appreciated 0.5% against the US dollar, compared with a regional average decline of 0.6%.
This performance was supported by narrowing interest rate differentials and reduced tariff uncertainties following the US-Malaysia trade deal announcement.
The 10-year Malaysian Government Securities yield rose 4 basis points, compared with the regional average of 0.4 basis points.
This reflected fading expectations of further Overnight Policy Rate cuts by the central bank.
The benchmark FBM KLCI slipped 0.2% during the month, compared with a regional average gain of 5.3%.
BNM noted the marginal dip reflected profit-taking by non-resident investors.
Headline inflation eased to 1.3% in October from 1.5% in September.
Core inflation edged up to 2.2% during the same period.
Exports grew 15.7%, driven by strong performance in the electrical and electronics sector.
Imports rose 11.2% on higher capital goods demand related to data-center investments.
Credit to the private non-financial sector grew 5.7%, supported by steady loan growth and increased working-capital financing among non-SMEs.
Household loan growth remained stable at 5.7%.
The banking system maintained healthy liquidity buffers with a Liquidity Coverage Ratio of 147.5%.
Asset quality remained sound with impaired loan ratios unchanged and loan-loss coverage at 126.4%.
