Ringgit firmer on stronger-than-expected GDP growth

The Malaysian ringgit strengthened against the US dollar on Friday due to Malaysia's stronger-than-anticipated second-quarter GDP growth. The US Dollar Index declined by 0.17% to 99.798 points following softer US inflation data from the Consumer Price Index (CPI) and Producer Price Index (PPI). At 6 pm, the ringgit traded at 4.0840/4.0885 against the US dollar, up from Thursday's close of 4.0850/4.0890.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid noted that Malaysia's Q2 2026 GDP growth of 6.0% exceeded the consensus estimate of 5.8%. The resilience of the Malaysian economy, he explained, was evident despite facing increased foreign economic uncertainties. Earlier, Bank Negara Malaysia attributed the growth to sustained domestic demand and robust exports, with household spending driven by steady income growth and ongoing policy support.

Investment growth, meanwhile, was bolstered by continued spending on structures and machinery and equipment. The growth surpassed the 5.4% registered in Q1. Externally, export growth accelerated, driven by strength in electrical and electronics products, services expansion, and a rebound in liquefied natural gas and non-E&E manufacturing exports.

The local currency weakened against a basket of major currencies, including the Japanese yen, British pound, euro, Indonesian rupiah, and Singapore dollar.