KUALA LUMPUR: MBSB Investment Bank Bhd (MBSB IB) expects the ringgit to remain supported by Malaysia’s relatively resilient economic fundamentals, although short-term movements are likely to remain sensitive to United States’ monetary policy expectations and broader risk sentiment.
In a research note yesterday, MBSB IB said it maintained its expectation for the ringgit to average around RM4.01 in 2026 before ending the year at around RM4.03, despite continued volatility arising from changing expectations over the US Federal Reserve’s (Fed) policy path.
“A more sustained appreciation of the ringgit would require clearer signs of disinflation in the United States, which could reduce expectations of prolonged Fed policy restrictiveness and improve global risk appetite.
“A less hawkish Fed would likely encourage renewed portfolio flows into emerging markets, providing additional support to the ringgit and other emerging market currencies,” it said.
According to MBSB IB, despite Malaysia’s resilient macroeconomic fundamentals, the domestic equity market returned to net foreign outflows, recording a strong outflow of US$426mil in August 2026 compared to a net inflow of US$74mil in July 2026.
It noted that in the bond market, the data showed foreign holdings of local debt securities declining by RM5.6bil to RM304.2bil from RM309.8bil in June 2026. — Bernama
