KUALA LUMPUR (Oct 15): MARC Ratings Bhd expects the ringgit to appreciate to below 4.0 to the US dollar by mid-2026, as bets on the ringgit’s appreciation get more bullish.
Second Finance Minister Datuk Seri Amir Hamzah Azizan has set expectations for the ringgit to strengthen to below 4.0 against the greenback within a 12-month period. Meanwhile, Bloomberg data showed that economists from eight research houses forecast the local note to reach around 4.125 by end-2026.
MARC Ratings however on Wednesday said it expects the ringgit to appreciate to 4.05 to the US dollar by the fourth quarter of 2025 and 3.93 by mid-2026, supported by improving fiscal discipline and more interest rate cuts in the US.
MARC Ratings chief economist Dr Ray Choy during a briefing on the research house's views post Budget 2026 said key tailwinds supporting the ringgit’s outlook include the prospect of further US rate cuts, improving investor sentiment in Malaysia, continued fiscal consolidation, ongoing structural reforms, and resilient domestic growth.
Choy said these factors collectively underpin MARC Ratings’ expectations of a “healthy and appreciating trajectory” of the ringgit's performance through 2026.
“Although global risks remain elevated, Malaysia’s economic fundamentals remain healthy. Malaysia's fiscal position is also improving with subsidy rationalisation making headway, through the implementation of various schemes such as the Budi Madani RON95 (Budi95) fuel subsidy [initiative],” Choy said.
He noted that the ongoing structural reforms — including the Fiscal Responsibility Act, Government Procurement Act, and targeted subsidy rationalisation — together with improving governance indicators are key to strengthening Malaysia’s fiscal framework.
MARC Ratings expects gross domestic product growth of 4.2% in 2025 and 4% in 2026, driven by Malaysia's infrastructure developments and economic plans, including the Johor-Singapore Special Economic Zone and the Pan Borneo Highway.
At the time of writing on Wednesday, the ringgit was traded at 4.2250 against the greenback, according to Bloomberg. Year to date, the local currency has appreciated 5.4%.