kuala lumpur: Supported by solid domestic economic fundamentals, fiscal reforms and a soft greenback, the Malaysian ringgit is expected to rise to RM3.93 against the US dollar by mid-2026.
Dr Ray Choy, chief economist at Malaysian Rating Corporation Bhd, said the local currency has weathered the storm of 2025 despite rising geopolitical and trade tensions, reflecting confidence in Malaysia’s economic strength and recovery trajectory.
He said the Malaysian ringgit is expected to appreciate moderately in 2025, with a forecast of 3.93 against the US dollar by mid-2026.
Choy made the comments during his presentation titled “Budget 2026: Building resilience amid global risks” at the virtual event ‘MARC360 Reflections: Analysis of Malaysia’s Budget 2026 and post-Budget debate’.
He said Malaysia’s improvement to 23rd place in the world competitiveness ranking, along with the ongoing policy reforms under the 13th Malaysia Plan, have strengthened investor confidence in the country’s outlook.
Choy said the Malaysian ringgit is expected to have a continued healthy and appreciable trajectory until 2026.
During the next panel session, OCBC Bank Senior ASEAN Economist Lavanya Vekataswaran said the ringgit’s appreciation this year reflected continued foreign inflows into Malaysian assets, supported by the diversification of the US dollar.
He said the ringgit has appreciated significantly, indicating very positive sentiment at the moment, with inflows coming into both equity and bond markets.
Lavanya said Malaysia is set 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 the end of the year, Choy said the currency’s outlook is based on 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 only cut rates once, creating a positive interest rate differential that supports ringgit appreciation.
He said most of the trade-related negatives have already been priced in, suggesting some of those negatives will ease in 2026 and that global and regional investors are recognizing Malaysia’s political stability.
Choy said he is more cautiously optimistic about the trajectory into 2026, adding that the combination of resilient domestic fundamentals and improving global monetary conditions are likely to maintain the ringgit’s appreciating trend over the next year. – Bernama
