MUFG Bank Ltd anticipates that the ringgit will fortify to 3.70 against the U.S. dollar by the end of 2026. This expectation is bolstered by an enduring appreciation cycle fueled by robust structural fundamentals.
Lloyd Chan, the bank’s senior currency analyst, claims that this forecast is rooted in the continuous inflow of investment in the Information and Communication Technology (ICT) sector. Other factors such as macroeconomic stability, supportive governmental policies, and enhanced capital flows also contribute to this prediction.
Chan notes that there is a vigorous investment cycle currently taking place in Malaysia. This cycle, he believes, underpins the country’s prospects for medium-term economic growth.
Investment approvals in the manufacturing and services sectors have risen by 14.7% year-on-year during the first nine months of 2025. Foreign Direct Investment (FDI) has played a significant role in this upswing in capital expenditure.
According to Chan, this increase signals a revived confidence in Malaysia’s policy framework, infrastructure, and role in regional supply chains.
The ICT sector has emerged as the primary contributor to the total approved investments within Malaysia. There has been a noticeable increase in foreign participation in this sector since 2022. Chan points out that the country’s ICT investment approvals experienced a year-on-year surge of about 32% in the first nine months of 2025.
Chan observes that Malaysia’s macroeconomic stability has reduced risk premiums. Despite the rationalization of RON95 fuel subsidies and adjustments to sales and services tax, inflation has remained under control. This has allowed Bank Negara Malaysia (BNM) to maintain policy stability.
On February 12, the ringgit ascended to a new high of 3.8995 against the U.S. dollar. This is its strongest level in nearly eight years. The last time it traded in this range was on April 23, 2018, when it was valued at 3.8965/8995 against the dollar.
What is the forecast for the ringgit against the U.S. dollar by the end of 2026?
The MUFG Bank Ltd predicts that the ringgit will strengthen to 3.70 against the U.S. dollar by the close of 2026.
Which sector has been the major contributor to total approved investments in Malaysia?
The Information and Communication Technology (ICT) sector has been the primary contributor to the total approved investments in Malaysia.
What factors have contributed to maintaining policy stability in Malaysia?
The macroeconomic stability of Malaysia, reflected in their controlled inflation despite changes in fuel subsidies and sales and services tax, has allowed Bank Negara Malaysia to maintain policy stability.
