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.
According to BERNAMA News Agency, 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. This measured stance allows the ringgit to absorb global shocks while preserving policy credibility, domestic liquidity, and two-way market functioning.
The macro backdrop supports the projected range, with Malaysia's economy expanding by 5.8 per cent year on year in the second quarter, increasing first-half growth to 5.6 per cent. 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. June marked the 74th consecutive month of merchandise trade surplus, with external strength increasingly structural rather than purely cyclical.
Electrical and electronic products, semiconductors, advanced manufacturing, and digital infrastructure now provide a broader export base, reducing Malaysia's dependence on commodity cycles. Energy remains a fiscal variable, with crude prices influencing petroleum-related revenue. Each US$1-per-barrel increase generates roughly RM300 million in additional non-dividend receipts, partially offsetting a projected fuel subsidy bill approaching RM40 billion in 2026. Despite challenges, the fiscal position remains resilient.
International reserves further anchor the economy, with BNM's reserves at US$131.8 billion as of July 15, sufficient to finance 4.7 months of imports and cover 0.9 times short-term external debt, despite a modest decline from end-June. Within the "Fabulous Five" countries-Malaysia, Indonesia, Vietnam, Thailand, and the Philippines-the ringgit's proposition is comparative rather than absolute, offering deeper capital markets, stronger institutional continuity, and a more predictable monetary framework than many regional peers.
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 underpinned by monetary discipline, external strength, and improving economic complexity.