KUALA LUMPUR: Malaysia’s resilient growth, durable trade surplus and disciplined monetary framework are expected to underpin the ringgit through the second half of 2026 (2H 2026), with the local currency projected to trade within the 3.90-4.20 range against the US dollar, said Juwai IQI global chief economist Shan Saeed.
He said the ringgit’s case for the 2H 2026 rests less on momentum than on policy credibility and external ballast.
"Bank Negara Malaysia’s (BNM) strategic value lies in consistency. By maintaining the Overnight Policy Rate at 2.75 per cent, the central bank has balanced price stability, domestic growth and orderly financial conditions without defending an explicit exchange-rate target.
"That measured stance matters. It allows the ringgit to absorb global shocks while preserving policy credibility, domestic liquidity and two-way market functioning,” he told Bernama.
He said the macro backdrop supports the range, noting that Malaysia’s economy expanded 5.8 per cent year on year in the second quarter, lifting first half growth to 5.6 per cent, while first half trade rose 22.4 per cent to a record RM1.8 trillion, exports advanced 27.5 per cent, and the cumulative surplus widened to RM147.1 billion.
Shan said June marked the country’s 74th consecutive month of merchandise trade surplus, adding that the external strength is increasingly structural rather than purely cyclical.
He said electrical and electronic products, semiconductors, advanced manufacturing and digital infrastructure now provide a broader export base, reducing Malaysia’s dependence on commodity cycles alone.
"Energy remains a two-sided fiscal variable. Higher crude prices increase petroleum-related revenue, with each US$1-per-barrel move estimated to generate roughly RM300 million in additional non-dividend receipts.
"Yet, that benefit only partly offsets a projected fuel subsidy bill approaching RM40 billion in 2026. The fiscal position is therefore more resilient than exposed, but not immune to a prolonged energy shock,” he added.
He said international reserves remain a further anchor, with BNM’s reserves at US$131.8 billion as at July 15, sufficient to finance 4.7 months of imports and cover 0.9 time short-term external debt, despite a modest decline from end-June.
"Within the Fabulous Five countries, namely Malaysia, Indonesia, Vietnam, Thailand and the Philippines, the ringgit’s proposition is comparative rather than absolute.
"Malaysia offers deeper capital markets, stronger institutional continuity and a more predictable monetary framework than many regional peers,” he said.
He added that the local currency’s projected trading range of 3.90-4.20 against the US dollar remains defensible, barring a materially hawkish US Federal Reserve repricing, sustained portfolio outflows or a deterioration in Malaysia’s external balance.
"The ringgit is not a one-way appreciation trade, it is a comparatively credible ASEAN currency underwritten by monetary discipline, external strength and improving economic complexity,” he said. - Bernama
