THE Malaysian ringgit is expected to remain largely stable against the US dollar next week, supported by improving domestic economic fundamentals despite ongoing caution in global financial markets and a shortened trading week due to public holidays.
Bank Muamalat Malaysia Bhd Chief Economist Dr Mohd Afzanizam Abdul Rashid said the local currency was likely to trade within a narrow band of between RM3.95 and RM3.97 against the greenback as investors monitor upcoming United States inflation data.
According to him, market attention next week will centre on the release of the US Personal Consumption Expenditures (PCE) inflation figures for April, a key indicator closely watched by the US Federal Reserve.
“It seems the PCE is likely to be on the high side in light of the elevated petrol prices during April. In addition, it is a holiday-shortened week following the Aidiladha celebration on Wednesday.
“Hence, ringgit will maintain its narrow range trade,” he told Bernama.
Despite expectations of subdued currency movement in the near term, Mohd Afzanizam said Malaysia’s broader macroeconomic indicators remained comparatively strong and continued to provide support for the ringgit.
He noted that Malaysia’s current account surplus widened significantly to 3.0 per cent of gross domestic product (GDP) in the first quarter of 2026, compared with only 0.5 per cent in the final quarter of 2025.
“Our surplus in the current account balance widened to 3.0 per cent of gross domestic product (GDP) in the first quarter of this year (1Q 2026) from 0.5 per cent in the fourth quarter of last year.
“Fiscal deficits narrowed to 3.3 per cent of GDP in 1Q 2026 from 4.5 per cent in 1Q 2025,” he said.
He also highlighted the steady rise in Malaysia’s foreign exchange reserves, which increased to US$129.5 billion as of May 15 this year compared with US$125.5 billion recorded at the end of 2025.
The ringgit ended the week weaker against the US dollar at 3.9655/9700 on Friday compared with 3.9515/9580 a week earlier amid cautious global market sentiment and ongoing currency volatility.
Against other major currencies, the local note traded mixed throughout the week.
The ringgit weakened against the United Kingdom pound sterling, falling to 5.3245/3305 from 5.2749/2835 previously.
However, it appreciated slightly against the euro to 4.6012/6064 from 4.5948/6024 and strengthened marginally against the Japanese yen to 2.4925/4954 from 2.4927/4968.
Within the regional market, the ringgit also traded unevenly against several ASEAN currencies.
It strengthened against the Indonesia rupiah to 223.8/224.1 from 224.5/225.0 previously, but weakened against the Singapore dollar to 3.0985/1023 from 3.0871/0927.
The local currency also slipped against the Thailand baht to 12.1421/1611 from 12.0989/1247 and edged lower against the Philippines peso to 6.42/6.44 from 6.40/6.41.
Trading activity next week is expected to remain thin due to multiple public holidays, with the domestic market closed on May 27 for Aidiladha before reopening on May 28.
Markets will also shut again on June 1 and June 2 in conjunction with the King’s Birthday and Wesak Day holidays before resuming operations on June 3. - May 23, 2026
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