KUALA LUMPUR, July 6 (Xinhua) -- Malaysia's ringgit is expected to remain under pressure from a stronger U.S. dollar and persistent global uncertainties, prompting some economists to revise their forecasts for a weaker local currency in 2026 despite resilient domestic economic fundamentals.
MBSB Research has lowered its ringgit outlook in its recent report after the currency traded weaker than previously anticipated, forecasting the ringgit to average MYR4.01 against the dollar in 2026, compared with its earlier projection of MYR3.92. It also expects the currency to end 2026 at MYR4.03 per dollar, versus its previous forecast of MYR3.85.
Its in-house forecast expects the ringgit to remain broadly stable at around MYR4.10 per dollar in 2026
The research house said near-term movements in the ringgit would be heavily influenced by external factors, particularly the continued strength of the dollar driven by safe-haven demand amid geopolitical tensions and expectations of tighter U.S. monetary policy.
However, MBSB said the ringgit's downside risk should be limited by Malaysia's strong economic fundamental s, including resilient gross domestic product growth, a healthy labor market, sustained foreign direct investment inflows, robust exports and a healthy trade surplus.
In addition, robust exports and higher trade surplus are also supportive of the ringgit outlook.
Hong Leong Investment Bank has in its recent report forecasted the ringgit to average MYR4.10 per dollar in 2026, improving from MYR4.28 in 2025, with a year-end target of MYR4.05.
The bank said capital inflows are likely to remain subdued in the near term due to uncertainty over the U.S. Federal Reserve's policy path, geopolitical tensions in the Middle East and Malaysia's domestic political landscape. However, it expects the ringgit to recover later in the year as policy and political uncertainties ease. ■