Malaysian Ringgit Fluctuates Amid US Inflation and Geopolitical Tensions

The Malaysian ringgit showed significant volatility against the US dollar from July 13 to July 15, 2026, as investors reacted to geopolitical instability and economic indicators. The currency opened lower on July 13 due to a fragile ceasefire between the United States and Iran and shipping uncertainties in the Strait of Hormuz, which pushed up crude oil prices and US Treasury yields. Although the ringgit closed slightly higher that Monday, it depreciated again on July 14, closing at 4.0760/0800.

Mohd Afzanizam Abdul Rashid, Chief Economist of Bank Muamalat Malaysia Bhd, noted that tensions in West Asia and rising US Treasury bonds—reaching 4.62% for 10-year notes—supported the US dollar index, which climbed to 101.276 points. By July 15, the ringgit opened higher at 4.0740/4.0780. This recovery coincided with the release of US June inflation data, which showed a 0.4% month-on-month drop in the consumer price index, the largest decline since May 2020.

Market focus has shifted toward Malaysia's second-quarter advance GDP figures due for release on July 17. Abdul Rashid forecasts a GDP expansion of 5.1%, attributing growth to strong external demand for electrical, electronic, and commodity products, though he cautioned that limited consumer spending may keep overall growth in check.