What is the outlook for the ringgit ahead of Budget 2026?

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The ringgit's outlook is cautiously optimistic, with trading expected between RM4.21 and RM4.22 against the US dollar, influenced by anticipated fiscal discipline in Budget 2026.

The Malaysian ringgit opened higher against the US dollar, driven by renewed buying interest stemming from optimism that the government will uphold fiscal discipline and progressively reduce the fiscal deficit in Budget 2026. At 8am, the local currency strengthened to 4.2100/2205 against the greenback, a rise from the previous day's closing of 4.2135/2180. Market sentiment this week is expected to be significantly shaped by the tabling of Budget 2026 on Friday.
Fiscal Discipline and Deficit Reduction Expectations

The renewed buying interest in the ringgit is directly linked to expectations surrounding the upcoming Budget 2026. Investors are anticipating that the Malaysian government will demonstrate a commitment to fiscal discipline, which includes a plan to gradually reduce the nation's fiscal deficit as a percentage of its gross domestic product. This focus on responsible fiscal management is seen as a key driver for the currency's current upward movement.
Trading Range and Market Sentiment

The immediate outlook for the ringgit suggests a trading range between RM4.21 and RM4.22 against the US dollar for the day. This forecast is contingent on market sentiment, which is expected to be heavily influenced by the details and announcements within Budget 2026. The tabling of the budget on Friday is therefore a critical event that traders and investors are closely monitoring for further direction.
Performance Against Major and ASEAN Currencies

The ringgit's performance was mixed when evaluated against a basket of major global currencies. It experienced a decrease against the euro and weakened in relation to the British pound. However, it showed appreciation against the Japanese yen. Within the ASEAN region, the ringgit largely traded higher, appreciating against the Thai baht, Indonesian rupiah, and Philippine peso. Nevertheless, it saw a decline against the Singapore dollar during early trading sessions.

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What is the outlook for the ringgit ahead of Budget 2026?

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