KUALA LUMPUR, Oct 15 — The ringgit is expected to rise to RM3.93 against the United States (US) dollar by mid-2026, supported by solid domestic economic fundamentals, fiscal reforms, and a softer greenback, said MARC Ratings Bhd.
Its chief economist Ray Choy said the local currency has weathered the storm in 2025 despite elevated geopolitical and trade tensions, reflecting confidence in Malaysia’s economic strength and reform trajectory.
“So overall, we can actually see a general appreciation of the Malaysian ringgit in 2025. Our forecast is 3.93 (against the US dollar) by the middle of 2026.
"Essentially, when we talk about the ringgit, we are referring to a currency pair that reflects not only external risks but also the underlying economic fundamentals of both the United States and Malaysia,” he said during his presentation 'Budget 2026: Building Resilience Amid Global Risks'.
It was delivered at the 'MARC360 Reflections: Analyses of Malaysia’s Budget 2026 and Post-Budget Debates' webinar today.
Choy added that the continued policy reforms under the 13th Malaysia Plan, together with improvements in Malaysia’s world competitiveness ranking to 23rd place, have reinforced investor confidence in the country’s outlook.
“With regards to our ringgit forecast, we do expect a continued healthy and appreciating trajectory of the Malaysian ringgit through 2026,” he said.
During the subsequent panel session, OCBC Bank senior Asean economist Lavanya Vekataswaran said the ringgit’s appreciation this year reflected sustained foreign inflows into Malaysian assets, supported by diversification out of the US dollar.
“The ringgit has actually appreciated quite a bit, and that tells you sentiment is fairly positive at the moment. We have seen inflows coming into both the equity and bond markets, and although the trend has become mixed in recent months, the currency has remained well supported,” she said.
Lavanya noted that Malaysia is poised to benefit from portfolio diversification away from the US dollar into regional markets, identifying Malaysian Government Securities as a key beneficiary of this shift.
Meanwhile, responding to a question on whether it is overly optimistic to expect the Malaysian ringgit to strengthen to RM4 against the US dollar by year-end, Choy said the currency’s outlook remains underpinned by several tailwinds.
This includes expectations that the US Federal Reserve may cut interest rates three to four times over the next 12 months, while Malaysia may ease rates only once, creating a positive interest-rate differential that supports ringgit appreciation.
He said that most trade-related negatives have already been priced in, suggesting some easing of those negatives in 2026, and that global and regional investors are recognising Malaysia’s political stability, which has led to positive allocation inflows into Malaysian assets in recent months.
“I am cautiously more optimistic about the trajectory in 2026,” he said, adding that the combination of resilient domestic fundamentals and improving global monetary conditions would likely sustain the ringgit’s appreciating trend into next year.
