Ringgit Rally Spurs Forecast of 3.70 Against US Dollar by 2026

KUALA LUMPUR – The ringgit’s recent rally has revived memories of its post-peg surge in 2005, with Japanese lender MUFG Bank Ltd forecasting further gains to 3.7000 against the US dollar by end-2026.

The currency, which rebounded from a 24-year low of 4.80 in early 2024, recently broke below the 4.00 mark for the first time in nearly eight years, closing at 3.9000 on Feb 12. MUFG expects the ringgit to strengthen steadily, projecting 3.8500 in Q1 2026, 3.8000 in Q2, 3.7500 in Q3 and 3.7000 in Q4.

Ringgit Rally

The bank said the appreciation cycle is anchored in Malaysia’s structural fundamentals, particularly ICT-led investment inflows, macroeconomic stability and improving capital flow dynamics. Analysts noted that strong foreign direct investment in the IT sector, resilient domestic growth, and portfolio inflows into equities and bonds are boosting sentiment. Bursa Malaysia has climbed above 1,750 points, with foreign investors acting as net buyers.

Economic experts, including UniKL’s Dr Aimi Zulhazmi and Bank Muamalat’s Dr Mohd Afzanizam, said the ringgit’s trajectory is supported by robust macro data, reformist policies, and rising investor confidence. They highlighted the multiplier effect of ICT investments across construction, retail, logistics and real estate.

External factors such as firmer commodity prices, resilience in the Chinese yuan, and expectations of US Federal Reserve easing are also seen as tailwinds. However, risks remain, including global growth slowdowns, weaker electronics exports, or renewed pressure on regional currencies.

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