MYR: Resilient macro backdrop supports Ringgit – DBS

DBS Group Research economist Chua Han Teng highlights that Malaysian financial markets, including the Ringgit (MYR) and benchmark equities, have held up year-to-date thanks to resilient macroeconomic conditions and capital inflows. Bank Negara Malaysia projects 2026 GDP growth of 4.0-5.0% and inflation of 1.5-2.5%, and is expected to keep policy on hold, anchoring bond yields despite Middle East risks.

BNM outlook underpins Ringgit resilience

"Malaysian financial markets’ resilient year-to-date performance (Malaysian ringgit: +0.3%; benchmark equity index: +0.6%) reflects favourable macroeconomic conditions that have supported capital inflows, despite lingering global uncertainties, including heightened tensions in the Middle East."

"Expectations that this positive backdrop will continue were underscored by Bank Negara Malaysia (BNM)’s cautiously optimistic outlook updated on March 31."

"BNM forecasts economic growth of 4.0-5.0% in 2026 (DBSf: 4.7%), compared to the government’s 4.0-4.5% projection released during last year’s Budget 2026."

"The central bank also forecasts headline inflation to average 1.5-2.5% in 2026 (DBSf: 2.0%), compared to 1.3-2.0% announced in Budget 2026, reflecting expectations of contained and moderate price pressures from both external and domestic sources."

"Overall, BNM reiterated that Malaysia is confronting the geopolitical uncertainties from a position of strength, and we expect the central bank to remain on hold in 2026, anchoring bond yields, barring a significant deviation from its refreshed outlook."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)