PETALING JAYA: As the ringgit made its mark as Asia’s best-performing currency for the second consecutive year, economists say that the currency’s continued strength will help boost Malaysian households’ consumption in 2026.
Mohd Sedek Jantan, director of investment strategy and country economist at IPPFA Sdn Bhd, told StarBiz that a firmer ringgit reduces the cost of imported goods, including food, fuel, medicines, vehicles and household electronics.
This directly lowers inflation and increases real purchasing power for households.
“People feel this in their daily spending, not just in trade statistics. When the ringgit is stronger, the same salary buys more, and that quietly changes spending behaviour across the economy.”
At the same time, Sedek said that a stable and stronger currency helps keep financial conditions supportive.
Additionally, lower inflation expectations give Bank Negara Malaysia more room to keep interest rates steady, which supports borrowing, housing activity and consumer confidence.
This combination of lower prices and easier financial conditions creates a more durable base for consumption growth.
To put it simply, when the ringgit strengthens, a family buying groceries, paying for fuel, renewing insurance or purchasing a mobile phone is paying less than they otherwise would.
“Over a year, those savings add up.
“That money does not disappear.
“It is spent on eating out, education, domestic travel or small home improvements.
“This is how a stronger currency quietly feeds into local businesses and jobs, even though it begins with imports.”
The ringgit surged by about 10% versus the US dollar in 2025, underpinned by contained inflation levels, sustained foreign bond inflows and improving prospects on the Malaysian Government Securities-US Treasuries yield differentials in favour of Malaysia.
