Economists see Malaysia's ringgit upside in H2 as U.S. dollar softens
OCBC Bank said in a recent note that its projection for a firmer MYR in the second half takes into consideration both domestic and external factors.
On the domestic front, supportive drivers include robust foreign direct investment inflows, prospects of continued foreign fund inflows, current account surplus, and commitment to follow through fiscal consolidation, which also provides reassurance to investors.
In terms of external factors, the soft USD trend is likely intact, while a more sustained economic turnaround for the Chinese economy, and recovery in sentiment and confidence in Chinese assets, including the Chinese currency RMB, can have positive spillover effects onto MYR from investment, trade and sentiment channels.
According to the bank, the Malaysian ringgit has appreciated about 5.5 percent versus USD year to date. The broad USD sell-off and a steady RMB were some of the key drivers alongside tariff de-escalation.
Meanwhile, Hong Leong Investment Bank Research said in a recent note that going into the second half, it expects capital inflows to remain bumpy given the continued uncertainty surrounding tariffs, geopolitical tensions and other policy responses.
TA Securities also said in a note that the ringgit is expected to strengthen gradually, averaging MYR 4.20 against the USD this year and trending towards a low of MYR 4.10 in late 2025.
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