Ringgit closes almost flat, cautious trade before GDP announcement

KUALA LUMPUR, Aug 13 — The Malaysian ringgit remained virtually unchanged against the US dollar as investors adopted a cautious stance, awaiting Malaysia's GDP figures for the second quarter, scheduled to be released the following day. This cautious trade was prompted by the fact that US inflation data had fallen in line with expectations, thereby maintaining the greenback's value.

By 6pm, the ringgit had settled at 4.0850/0890 against the US dollar, down from its previous close of 4.0835/0875. Dr Mohd Afzanizam Abdul Rashid, Chief Economist of Bank Muamalat Malaysia Bhd, stated that the market was taking a 'wait-and-see' approach ahead of the economic performance data releases from Bank Negara Malaysia and the Department of Statistics Malaysia.

He added that Malaysia's 2Q 2026 GDP growth was estimated to be 5.8% year-on-year, up from 5.4% in Q1 2026. This growth was anticipated to be confirmed or even surpass expectations based on indicators like the Industrial Production Index (IPI) and Malaysia's services activity. The IPI had risen by 6.5% year-on-year in June 2026, indicating positive momentum across all sectors.

Meanwhile, the services activity had grown by 5.9% year-on-year in Q2 2026, spurred by stronger wholesale and retail trade, food and beverage, and accommodation sectors, as reported by the Department of Statistics Malaysia. Regarding the US dollar's performance, Dr Mohd Afzanizam mentioned that the slight decrease in the US inflation rate to 3.4% suggested that a rate hike decision at the Federal Open Market Committee's September meeting was not yet certain.

He noted that the US CPI index released previously pointed towards the possibility of keeping the interest rate unchanged for the September meeting instead of increasing it further. Consequently, the interest rate differential between the US rate and the overnight policy rate might attract more investors. The ringgit also ended mostly stronger against a basket of major currencies.

It rose against the Japanese yen to 2.5634/5660 from 2.5655/5682, improved against the British pound to 5.5119/5173 from 5.5180/5234, and fell against the euro to 4.7120/7167 from 4.7107/7153. However, it declined against the euro to 4.7120/7167 from 4.7107/7153. The local note exhibited mixed performance against regional currencies, being marginally higher against the Philippine peso at 6.66/6.67 and up against the Thai baht at 12.3239/3412.

It remained unchanged against the Indonesian rupiah at 228.4/228.8 and declined against the Singapore dollar to 3.1912/1945.