KUALA LUMPUR: The Malaysian ringgit is expected to rise to RM3.93 against the US dollar by mid-2026, supported by solid domestic economic fundamentals, fiscal reforms, and a softer greenback.
Malaysian Rating Corporation Bhd chief economist Dr Ray Choy said the local currency has weathered the storm in 2025 despite elevated geopolitical and trade tensions, reflecting confidence in Malaysia’s economic strength and reform trajectory.
He stated that a general appreciation of the Malaysian ringgit is expected in 2025, with a forecast of 3.93 against the US dollar by the middle of 2026.
Choy delivered these remarks during his presentation titled “Budget 2026: Building Resilience Amid Global Risks” at the virtual event ‘MARC360 Reflections: Analyses of Malaysia’s Budget 2026 and Post-Budget Debates’.
He said the continued policy reforms under the 13th Malaysia Plan, together with improvements in Malaysia’s world competitiveness ranking to 23rd place, have reinforced investor confidence in the country’s outlook.
Choy added that a continued healthy and appreciating trajectory of the Malaysian ringgit through 2026 is expected.
During the subsequent panel session, OCBC Bank senior ASEAN economist Lavanya Vekataswaran said the ringgit’s appreciation this year reflected sustained foreign inflows into Malaysian assets, supported by diversification out of the US dollar.
She noted that the ringgit has appreciated quite a bit, indicating fairly positive sentiment at the moment, with inflows coming into both the equity and bond markets.
Lavanya added that Malaysia is poised to benefit from portfolio diversification away from the US dollar into regional markets, identifying Malaysian Government Securities as among the key beneficiaries of this shift.
Responding to a question on whether it is overly optimistic to expect the Malaysian ringgit to strengthen to RM4 against the US dollar by year-end, Choy said the currency’s outlook remains underpinned by several tailwinds.
This includes expectations that the US Federal Reserve may cut interest rates three to four times over the next 12 months, while Malaysia may ease rates only once, creating a positive interest-rate differential that supports ringgit appreciation.
He noted that most trade-related negatives have already been priced in, suggesting some easing of those negatives in 2026, and that global and regional investors are recognising Malaysia’s political stability.
Choy stated he is cautiously more optimistic about the trajectory in 2026, adding that the combination of resilient domestic fundamentals and improving global monetary conditions would likely sustain the ringgit’s appreciating trend into next year. – Bernama
