Ringgit steady against US dollar ahead of Malaysia’s third-quarter GDP estimate

KUALA LUMPUR — On October 16, the Malaysian ringgit remained stable against the US dollar before the country's third-quarter GDP forecast is released. The ringgit opened unchanged at 4.0800/0845, mirroring its close from the previous day. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid attributed the stability to external factors, such as the US dollar Index falling 0.53 percent to 102.005 points and Brent crude oil prices dropping to around US$105 per barrel.

Despite the downward trend in the US dollar, persistent inflation and the Fed's continued restrictive monetary policy may hinder the ringgit's improvement. The IEA's decision to sell 100 million barrels of oil from its reserves temporarily stabilized the oil market, but supply issues remained unresolved. Meanwhile, concerns over AI stocks led to a flight-to-safety trend, which reduced US Treasury yields.

The US Producer Price Index (PPI) for September remained high, with inflation rising 6.3 percent, surpassing expectations of 5.3 percent. This could prompt the Fed to maintain its tight stance during its meeting at the end of the month. Domestically, analysts are monitoring Malaysia's advance estimate of the third quarter (3Q) 2026 GDP, which is expected to be around 5.2 percent.

This growth is still favorable, as it surpasses its trend level, potentially supporting the ringgit if the overnight policy rate normalization occurs. The US dollar-ringgit pair is forecasted to range between RM4.07 and RM4.09 today.