Malaysia Says Economic Strength Should Support Ringgit Despite Volatility

By Ying Xian Wong

KUALA LUMPUR, Malaysia--Malaysia's solid economic fundamentals are expected to support the ringgit despite continued volatility driven by global and domestic developments, the Financial Markets Committee said.

Recent movements in the ringgit and regional currencies are being shaped by external factors, including expectations of higher U.S. interest rates amid persistent inflation concerns, despite easing geopolitical tensions following the interim peace agreement between the U.S. and Iran., the committee established by Bank Negara Malaysia said Wednesday.

The ringgit weakened against the dollar in June due to increased hedging activity amid a stronger dollar strengthened and equity rebalancing linked to MSCI's review of stocks in May, the FMC said.

Despite the currency's pullback, onshore foreign-exchange market conditions remained healthy, with average daily turnover rising to $21.3 billion this year from $19.8 billion in 2025, it said.

The dollar was recently 0.05% higher at 4.1400 ringgit, bringing the month-to-date gains to about 4.5%.

Malaysia's macroeconomic backdrop has remained intact, the FMC said, citing stronger-than-expected trade data and stable inflation. While foreign investors pared holdings in June, the outflows were mainly portfolio adjustments following the ringgit's strong performance earlier this year and a more neutral stance ahead of coming domestic state elections, it added.

Bank Negara Malaysia reiterated its commitment to maintaining orderly market conditions. Efforts to encourage inflows, including through the Qualified Resident Investor program and engagements with government-linked entities and corporates to repatriate and convert overseas earnings, will be stepped up, it added.

Write to Ying Xian Wong at yingxian.wong@wsj.com

(END) Dow Jones Newswires

June 23, 2026 22:21 ET (02:21 GMT)