Business

Ringgit expected to hold steady as Malaysia’s economic resilience offsets global risks

Traders wary of escalating geopolitical tensions involving Iran and the Strait of Hormuz which stands as a key external threat to market stability

Updated 1 month ago · Published on 16 May 2026 4:26PM

Ringgit expected to hold steady as Malaysia’s economic resilience offsets global risks
The country’s strong first-quarter economic growth and resilient domestic demand are expected to support the ringgit next week - May 16, 2026

THE ringgit is expected to remain within a narrow trading range against the US dollar next week as investors weigh Malaysia’s stronger-than-expected economic performance against mounting geopolitical uncertainty in the Middle East.

Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the local currency is projected to trade between RM3.94 and RM3.96 against the greenback, supported by solid domestic fundamentals and continued economic expansion.

He said Malaysia’s economy had thus far demonstrated considerable resilience, with both domestic consumption and external demand continuing to drive growth beyond earlier expectations.

“However, the second half of this year would be more critical should the war in Iran and the blockage of the Strait of Hormuz persist,” he told Bernama.

The cautious outlook comes despite encouraging economic indicators released by Bank Negara Malaysia on Friday, which showed the economy expanding by 5.4 per cent in the first quarter of 2026, slightly exceeding the advance estimate of 5.3 per cent.

According to the central bank, growth was underpinned by resilient household spending, favourable labour market conditions and sustained government policy support.

Investment activity also remained firm, driven by expenditure on machinery and equipment, structural investments and the implementation of long-term development projects.

Private consumption expanded by 4.7 per cent during the quarter, while private investment grew 7.8 per cent. Net exports surged by 13.5 per cent amid continued export growth and a faster moderation in imports.

Despite the positive economic data, the ringgit weakened slightly against the US dollar at Friday’s close, ending at 3.9515/9580 compared with 3.9185/9230 a week earlier.

Nevertheless, the local currency strengthened against several major global currencies during the week.

The ringgit appreciated against the British pound to 5.2749/2835 from 5.3354/3416 previously, rose against the euro to 4.5948/6024 from 4.6121/6174, and improved against the Japanese yen to 2.4927/4968 from 2.5010/5040.

The local note also posted gains against regional ASEAN currencies.

It strengthened versus the Singapore dollar to 3.0871/0927 from 3.0910/0948, appreciated against the Thai baht to 12.0989/1247 from 12.1640/1844, climbed against the Indonesian rupiah to 224.5/225.0 from 225.4/225.7, and improved against the Philippine peso to 6.40/6.41 from 6.46/6.47.

Economists said the ringgit’s near-term direction would likely continue to depend on external developments, particularly global oil supply risks linked to tensions surrounding Iran and shipping routes through the Strait of Hormuz, one of the world’s most critical energy corridors. - May 16, 2026

Spotlight

Malaysia

Johor polls turn into personality contest as PH, BN work to sway voters

By Alfian Z.M. Tahir

Malaysia

'My daughter was stabbed 14 to 16 times' - father of student stabbed at school

Malaysia

‘Malaysia’s wealth is enough for every man’s need but not greed’ - Anwar

Malaysia

Female student injured in stabbing incident at Banting school (video)

Sports & Fitness

Ten-man England edge Mexico to set up World Cup quarter-final clash with Norway

Malaysia

'I had no knowledge of alleged political donations linked to Jana Wibawa' - Tengku Zafrul

Malaysia

BN mulls seat swaps in Negeri Sembilan as Tok Mat pushes for election reset

Malaysia

Panther spotted along highway near Tasik Kenyir (video)

Malaysia

Kedah ruler calls for review of Penang lease payments, says current rate no longer reflects fair value

Opinion

When institutions rewrite the rules, we should all be concerned

By Vinod Sekhar

You may be interested

Business

US Dollar weakens as softer jobs data and oil decline cool Fed rate hike bets

Business

Malaysia smashes economic forecasts as tech trading and tourism boost GDP