Malaysian Ringgit Strengthens on AI Export Growth and Fed Divisions

The Malaysian ringgit strengthened against the US dollar on July 10, 2026, closing at 4.0695/4.0745. The currency's upward trajectory followed a period of stability on July 9, as the US dollar softened after Federal Open Market Committee meeting minutes revealed a divide among officials over whether to maintain or raise interest rates to combat inflation.

Bank Negara Malaysia supported currency confidence by maintaining its overnight policy rate at 2.75%. This decision aligned with market expectations and a projected 2026 GDP growth of 4% to 5%. The currency further gained as the Monetary Policy Committee highlighted a sharp rise in electrical and electronics exports, fueled by global investment in artificial intelligence and technology.

External volatility influenced trading patterns toward the end of the week. The ringgit initially faced headwinds from geopolitical tensions in the Strait of Hormuz, involving Iranian missile attacks on energy tankers and subsequent US air strikes. However, the currency rebounded as safe-haven demand for the US dollar declined following reports that mediators intended to continue peace negotiations.