Ringgit Falls Despite Strong 5.8% Malaysian GDP Growth

The Malaysian ringgit fluctuated between July 16 and July 17, 2026, ultimately depreciating to 4.0930/0990 against the US dollar. The currency initially strengthened on July 16, aided by a decline in the US Dollar Index and testimony from Federal Reserve Chairman Kevin Warsh suggesting a potential pause in interest rate hikes. This movement was supported by a ceasefire between the United States and Iran, which lowered energy prices and reduced the US producer price index.

By July 17, the ringgit's trajectory shifted. It opened flat before falling as market sentiment soured due to escalating developments in West Asia and the Middle East. This decline occurred despite Malaysia reporting an advance gross domestic product estimate of 5.8% for the second quarter of 2026, which surpassed the 5.3% consensus forecast.

Mohd Afzanizam Abdul Rashid, Chief Economist of Bank Muamalat Malaysia Bhd, stated that the economy remains resilient against fuel price uncertainties and protectionist trade policies from the United States. He noted that with average growth for the first half of 2026 at 5.6 per cent, the country is expected to maintain growth around five per cent for the full year.