Malaysian ringgit bank notes of different denominations are seen in this file picture illustration Aug. 20, 2013. Photo by Reuters
MUFG Bank Ltd expects the ringgit to strengthen toward 3.70 against the U.S. dollar by end-2026, underpinned by a more durable appreciation cycle driven by structural fundamentals.
Its senior currency analyst, Lloyd Chan, was quoted by local media as saying that the forecast is anchored in sustained information and communications technology (ICT)-led investment inflows, macroeconomic stability, supportive policy settings, and improving capital flows.
Malaysia’s economy is undergoing a strong investment cycle that will support its medium-term growth outlook, he said in a research released on Feb. 12.
Investment approvals in manufacturing and services rose 14.7% year-on-year in the first nine months of 2025, with foreign direct investment contributing to the capital expenditure upcycle.
Chan said this reflects renewed confidence in Malaysia’s policy framework, infrastructure and role in regional supply chains.
He highlighted that ICT has emerged as the largest contributor to total approved investments, with strong foreign participation since 2022. Malaysia’s ICT investment approvals surged about 32% year-on-year in the first nine months of 2025.
Chan said Malaysia’s macroeconomic stability has compressed risk premiums, with inflation remaining contained despite RON95 fuel subsidy rationalization and adjustments to sales and services tax, allowing Bank Negara Malaysia (BNM) to maintain policy stability.
The ringgit climbed to a fresh high of 3.8995 against the U.S. dollar on Feb. 12, hovering near its strongest level in almost eight years.
It last traded around that level on April 23, 2018, at 3.8965/8995 against the greenback.
