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Malaysia's central bank is ramping up efforts to support the ringgit after the currency became Asia's weakest performer this month, highlighting growing pressure from global interest-rate expectations and political uncertainty. The ringgit has fallen 4.3% against the US dollar in June, underperforming most regional peers as investors rotate toward dollar assets amid expectations that US interest rates could remain higher for longer. Why Is the Ringgit Under Pressure? Several factors have weighed on sentiment: External Factors Rising expectations of further US rate hikes Stronger US dollar globally Reduced appetite for emerging-market currencies Domestic Factors Political uncertainty ahead of upcoming state elections Foreign fund outflows from regional markets Cautious investor positioning The combination has pushed the ringgit to become the worst-performing Asian currency this month. Bank Negara's Response Rather than intervening aggressively in currency markets, Bank Negar...

Malaysia’s central bank is expected to  keep interest rates unchanged , as  inflation remains relatively muted  despite rising global energy prices linked to geopolitical tensions. Rate Pause Expected Amid Stable Inflation Bank Negara Malaysia  is widely expected to  hold the Overnight Policy Rate (OPR) at 2.75% , according to economists surveyed. Last rate move:  25bps cut in July 2025 Policy stance:  wait-and-see amid global uncertainty This contrasts with some regional peers that are considering  policy tightening  due to stronger inflation pressures. Inflation Still Within Manageable Range Malaysia’s inflation remains  contained compared to regional economies : CPI: 1.7% (March)  vs 1.4% in February Still within the central bank’s  2026 forecast range By comparison: Philippines:  7.2% inflation Vietnam:  5.46% inflation The relatively low inflation gives policymakers  room to delay tightening . Strong Ringgit...

Malaysia’s economy is expected to remain resilient in 2026, with  strong domestic demand and investments driving growth , even as global uncertainties persist. Key Highlights BNM forecasts GDP growth at 4%–5% in 2026 Higher than Ministry of Finance’s  4.0%–4.5% projection 2025 GDP grew 5.2% , beating expectations Key takeaway: Malaysia’s growth remains solid, supported by internal drivers despite global risks. What’s Driving Malaysia’s Growth? 1. Strong Domestic Consumption Supported by  steady income growth and labour market stability Civil servant salary adjustments to boost spending Private consumption remains the backbone of growth 2. Continued Investment Momentum Expansion driven by: E&E (electronics and semiconductors) ICT and digitalisation trends Ongoing infrastructure and approved projects Investment cycle remains positive, though moderating 3. Key Sectors Leading Growth Services sector (5.2% growth) Tourism (Visit Malaysia Year 2026) Financial services and I...

Bank Negara Malaysia  declared a  RM5 billion dividend for 2025 , maintaining payouts to the government despite a  moderation in earnings . Earnings Ease After Strong Prior Year BNM reported  net profit of RM12.45 billion in FY2025 , down  5.7% YoY  from RM13.16 billion. The decline was driven by: Lower total income (RM14.35 billion vs RM14.98 billion) Costs related to  reserve management and monetary operations Despite softer earnings, the central bank sustained its  second consecutive RM5 billion dividend , following a  record RM5.25 billion payout in 2024 . Strong Reserves Provide Stability A significant portion of profits —  RM7.45 billion  — was allocated to the  risk reserve , which rose to  RM155.31 billion . This reserve acts as a  financial buffer  against: Exchange rate volatility Global financial market fluctuations BNM highlighted that  85% of its assets are denominated in foreign currencies , re...

Bank Negara Malaysia kept its policy rate unchanged as global markets swung on rising oil prices, while Bursa Malaysia staged a rebound on bargain hunting despite geopolitical uncertainty. Key Takeaways US stocks tumbled as oil surged 7.5% on Middle East tensions FBM KLCI climbed 0.88% on bargain hunting Bank Negara maintained OPR at 2.75% Inflation remains moderate, giving BNM room to stay neutral Wall Street: Oil Spike Triggers Selloff Nasdaq Composite  22,669.91 (-0.6%) S&P 500 Index  6,814.48 (-0.8%) Dow Jones Industrial Average  47,890.61 (-1.7%) Crude Oil Futures  jumped 7.5% to US$80.24 per barrel after reports that Iran struck an oil tanker, escalating fears of supply disruption. The Strait of Hormuz — which handles roughly 20% of global oil supply — remains the focal point of risk following US-Israel airstrikes on Iran. Cryptocurrencies also retreated: Bitcoin  -3% Ethereum  -3.7% Key Point: Oil volatility is reviving inflation fears and pressu...

Malaysia’s central bank is widely expected to keep interest rates unchanged, opting for caution as the Iran war injects fresh uncertainty into the global economy. Key Takeaways Bank Negara Malaysia likely to hold OPR at 2.75% Iran war raises inflation and supply-chain risks Oil price spike could lift Malaysia’s inflation by up to 0.6ppt Markets pricing slight probability of rate hike over next 12 months Rate Decision: All Eyes on 2.75% Bank Negara Malaysia  is expected to maintain its overnight policy rate (OPR) at  2.75% , according to all 24 economists surveyed by Bloomberg. The central bank has adjusted rates only once in the past two years — a 25 basis-point cut in July 2025. Key Point: BNM is likely to stay neutral as geopolitical risks complicate the policy outlook. Inflation Risks Rising Escalating Middle East tensions have pushed up oil prices, raising concerns about imported inflation. According to  Oversea-Chinese Banking Corp : A 10% increase in global oil pric...

Bank Negara Malaysia (BNM)  has onboarded  three new projects  under its Digital Asset Innovation Hub (DAIH) to test  ringgit stablecoins and tokenised deposits , marking a major step in Malaysia’s digital payments evolution. What’s Being Tested? Three initiatives have been selected: 1️⃣  Ringgit Stablecoins for B2B Settlement Led by  Standard Chartered Bank Malaysia In partnership with  Capital A 2️⃣  Tokenised Deposits for Payments By  Malayan Banking 3️⃣  Tokenised Deposits for Payments By  CIMB Group Holdings Focus areas: Domestic and cross-border wholesale payments Tokenised asset settlements Why This Matters BNM said the controlled testing environment will help assess: Monetary stability risks Financial system implications Regulatory framework enhancements Importantly, BNM plans to provide  greater clarity on the use of ringgit stablecoins and tokenised deposits by end-2026. This could be a precursor to wholesale CBDC int...

Summary UBS expects the  ringgit to strengthen towards 3.80 against the US dollar by December , potentially reaching its strongest level in more than a decade. The outlook is supported by  strong capital inflows, AI-driven investments, a resilient trade surplus, and narrowing US–Malaysia interest rate differentials . Key Points Ringgit target: 3.80 per US dollar by December , last seen in 2015 Best-performing major Asian currency in early 2026 , up over  3% YTD More than 10% gain in 2025 , extending its recovery trend What’s Driving the Ringgit Higher Sustained foreign inflows  from multi-year investments into  data centres and the digital economy Global tech and AI demand  expected to remain strong into 2026, supporting Malaysia’s  trade surplus Narrowing interest rate gap  as the  US is expected to cut rates , while  Bank Negara Malaysia is likely to stay on hold This environment encourages  USD-to-ringgit conversions by corporate...

  Key Takeaways US markets extended gains as tariff risks eased and economic data surprised positively BM KLCI rose 0.66% after Bank Negara Malaysia kept rates unchanged Ringgit strengthened for a fourth straight session Stocks to watch: NATGATE, LSH, CAPITALA, among others Wall Street Summary U.S. equities posted a second straight day of gains, buoyed by easing geopolitical tensions and encouraging economic data. The  Nasdaq Composite  climbed  0.91% , leading the advance, while the  Dow Jones Industrial Average  rose  0.63%  and the  S&P 500  added  0.55% . Markets reacted positively after U.S. President Donald Trump ruled out military action to seize Greenland, scrapped proposed tariffs, and outlined a framework to resolve the issue alongside European NATO allies. All “Magnificent Seven” stocks rebounded, led by  Meta Platforms , which surged  5.6% , followed by  Tesla  (+4.2%). Broader tech sentiment was ...

Malaysian equities  edged higher on Thursday , while the ringgit held steady after  Bank Negara Malaysia  kept interest rates unchanged, reinforcing confidence in the country’s growth outlook. The  FTSE Bursa Malaysia KLCI  climbed about  0.6% , leaving the benchmark just shy of a  seven-year high , as investors welcomed the central bank’s steady hand. The ringgit traded at  4.0420 per US dollar , remaining one of Asia’s strongest currencies after rising nearly  0.5% month-to-date  and gaining  9% in 2025 . BNM held the  overnight policy rate at 2.75% , as widely expected, and projected economic growth at the  upper end of its outlook range , underscoring resilience supported by strong domestic demand and  record-high trade performance in 2025 . The upbeat fundamentals have eased pressure on policymakers to deliver further rate cuts. Analysts noted the central bank struck a balanced tone. ANZ economist Krystal Tan sai...

Bank Negara Malaysia  left its  Overnight Policy Rate (OPR) unchanged at 2.75% , a widely anticipated decision that reflects confidence in Malaysia’s stable growth and muted inflation outlook. The decision, announced after the Monetary Policy Committee’s first meeting of 2026, comes after a  25-basis-point rate cut in July 2025 , the country’s first easing move in five years. Since then, policymakers have opted to stay on hold, judging current conditions to be supportive enough without further stimulus. In its statement, BNM said the  current policy stance remains appropriate , balancing economic expansion with price stability, while stressing that it will continue to assess risks to growth and inflation amid a volatile global backdrop. Inflation dynamics remain favourable. The central bank expects  headline inflation to stay moderate in 2026 , helped by easing global cost pressures, while  core inflation is projected to remain stable and close to its long-...

Market Overview Malaysia is expected to  keep its benchmark interest rate unchanged  at its first policy meeting of the year, as  strong economic growth and subdued inflation  give policymakers room to remain patient amid rising global uncertainty. According to a Bloomberg survey, all economists expect  Bank Negara Malaysia  to hold the  overnight policy rate (OPR) at 2.75% , following a single 25-basis-point cut in July 2025. Why BNM Can Afford to Hold Malaysia’s economy ended 2025 on solid footing, outperforming earlier concerns around external shocks. Key supports include: Stronger-than-expected economic growth  in the second half of 2025 Record-high exports  last year, despite fears of US tariff-driven slowdowns Inflation at a five-year low of 1.4% , well below the central bank’s comfort range Together, these factors reduce the urgency for further policy easing. External Risks Are Rising Looking ahead, policymakers remain cautious. Malays...

Malaysia closed out 2025 with a  strong trade surprise and firmer inflation , riding a late-year export wave even as economists brace for a moderation in growth heading into 2026, according to  OCBC Group Research . December Trade Beats by a Wide Margin Malaysia’s December trade data  far exceeded market expectations , driven by a sharp acceleration in exports. Export growth jumped to  10.4% YoY  in December, up from 7% in November and well above the  2.5% consensus forecast . Imports remained solid at  12.0% YoY , though slower than November’s 15.8%. As a result, Malaysia’s  trade surplus widened to RM9.3 billion . Electronics Lead the Export Surge The export strength was largely powered by  manufactured goods , particularly: Electronics & Electrical (E&E) products Machinery and appliances Optical & scientific equipment OCBC attributed the surge to the ongoing  global electronics upcycle  and resilient demand from key m...

Morning Market Snapshot (Malaysia & US) 🇺🇸 Wall Street:  Closed for  Martin Luther King Jr. Day , resulting in muted regional cues. 🇲🇾 Bursa Malaysia:  Investors stayed cautious ahead of  Bank Negara Malaysia (BNM)  policy decision this week. Bursa Malaysia Performance FBM KLCI:   1,712.33  ( -0.02% ) Market tone:  Sideways, with investors in  wait-and-see mode Market breadth:  Losers  779  vs Gainers  359 Turnover:   3.08bn shares , value  RM2.74bn Top Movers Top Gainer:   Petronas Chemicals ($PCHEM)  +3.04% to RM3.39 Top Loser:   Axiata ($AXIATA)  -2.38% to RM2.46 USD/MYR:   4.0544  (-0.08%) BNM Outlook: Policy Rate Likely to Stay Put Economists broadly expect  no change to the Overnight Policy Rate (OPR)  at BNM’s January meeting. This follows a  stronger-than-expected Q4 2025 GDP estimate . Key GDP Highlights Q4 2025 GDP growth:   +5.7% YoY  (abov...