KUALA LUMPUR: A stronger ringgit is not seen as an impediment to trade growth, as the government still forecasts it to grow from its present record levels by up to another 5% in local currency terms this year.
The increasing value-added nature and complexity of export products is seen to help sustain export competitiveness and its appeal, even as the local currency continues to recover to its historical mean levels, said Deputy Investment, Trade and Industry (Miti) Minister Sim Tze Tzin.
Also, an aggressive trade diversification strategy by the country is seen to offset any effects of a stronger local currency, said Malaysia External Trade Development Corp (Matrade) chief executive officer Abu Bakar Yusof.
“Here at Matrade and Miti, we want to be more aggressive (in marketing) – the headwinds may be bigger this year but we’ll counter it with the support of industry players.
“To sustain this growth in trade, we will need to embark on a market diversification policy through free trade agreements and working strategically with our partners such as trade associations and foreign missions,” Abu Bakar said at a press conference after the announcement of Malaysia’s 2025’s trade performance yesterday.
Sim said he expects total trade to grow from anywhere between 3% and 5% this year, given the international economic and trade climate currently.
“There is a caveat – we are optimistic on achieving this target with the present economic situation.
“But if there are any black swan events – such as a major economic slowdown or crisis in our trade partners – this would be beyond our control.
“Last year Matrade targeted 3% to 5% as well but the actual figures exceeded this –this is a tremendous success. Last year people braced for an economic slowdown in the United States but it didn’t happen.”
Meanwhile, Matrade chairman Datuk Seri Reezal Merican Naina Merican noted that trade had grown strongly in the month of December last year, in spite of the strengthening local currency.
“The strengthening of the ringgit began in November 2025. We were concerned that trade figures in December would plummet but the opposite happened instead.
“Sometimes unanticipated factors will offset currency variables – such as a diversification strategy will help and this will be one of our main mantras,” Reezal Merican said.
Meanwhile, Sim suggested companies should embark on a more aggressive value-add strategy to ensure the sustainability of their export products.
“Much of our trade is from value-addition. For example, electrical and electronics (E&E) is the biggest export category for the country – usually they import semi-finished goods but the country value adds packaging and these are then re-exported.
“In this sense, the stronger ringgit doesn’t affect this much since they (companies) will be able to buy these goods cheaper in the first place,” Sim said.
He added that some traders, without much value addition, may have some issues.
“But if we can help them add value, then they can move towards a higher value market. The country shouldn’t be a low-cost producer, but rather move up higher in the value chain so that we make more ‘quality’ money.
“The ringgit is still in a manageable situation as it has only recovered to just below RM4 to the US dollar, and it was at stronger levels historically at RM3 per US dollar,” he added.
Malaysia’s total trade in 2025 reached an unprecedented RM3.06 trillion, which is a 6.3% increase year-on-year, surpassing the RM3 trillion mark for the first time in history.
This robust growth was driven by a 6.5% rise in exports to RM1.61 trillion and a 6.2% increase in imports to RM1.45 trillion, resulting in a trade surplus of RM151.80bil – the 28th consecutive year of positive trade balance since 1998, Matrade said.
Reezal Merican said surpassing the RM3 trillion mark is a historic milestone that underscores the resilience of Malaysia’s trade and export ecosystem.
“Matrade’s aggressive promotion and diversification into non-traditional markets like Kenya, Nigeria, Tanzania, Togo, Yemen, Morocco, Algeria, Uzbekistan, Angola, Puerto Rico and Kyrgyzstan have yielded double-digit growth.
“In 2026, we will continue to empower our micro, small and medium enterprises through customised exporters development and export promotion initiatives to ensure they remain competitive in the global supply chain,” he said in a statement.
The manufacturing sector remained the primary exports driver, with E&E products and machinery leading growth.
Palm oil-based products, meanwhile, saw a significant 16.2% increase.
While focusing on exports, Sim said in his speech that the country must not disregard the role of imports, as they are integral to the growth and competitiveness of the domestic economy.
“The importation of high-value and specialised products not produced locally is especially vital in supporting downstream industries and driving industrial advancement.”
Sim said this includes advanced machinery, specialised equipment, high-end components and critical raw materials that are not produced locally or cannot be supplied at the required scale or quality.
“These imports enable local industries to move up the value chain, improve productivity and produce higher-value goods for export.
“Malaysia can enhance competitiveness while maintaining a robust and sustainable trade balance,” Sim said.
