Malaysian Ringgit: Appreciation trend against US Dollar intact – MUFG

MUFG’s Lloyd Chan notes that USD/MYR has broken lower and remains constructive on the Ringgit, expecting fundamentals to support Ringgit appreciation over the next 12 months. Chan highlights Malaysia’s status as an Oil producer and net gas exporter, contained MYR volatility, and macro fundamentals including stable growth, anchored trade surplus, and steady foreign bond holdings.

Ringgit supported by solid fundamentals

"USD/MYR has recently broken lower and we stay constructive on the ringgit despite Middle East risks."

"Near-term volatility is expected, but fundamentals should support ringgit appreciation over next 12 months."

"Macro fundamentals and flows support MYR. We expect growth to remain at potential output of 4.8% in 2026, inflation relatively contained, BNM to stay on hold at 2.75%, and trade surplus anchored by electronics exports and steady terms of trade. Foreign bond holdings are stable, with central banks/governments now the largest foreign holder of local government bonds."

"MYR volatility has been contained. The initial rise in ringgit volatility was modest versus PHP and THB, and has since fallen below pre-conflict levels, underscoring lower relative vulnerability."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)