Kuala lumpur: Malaysia's external position is expected to remain resilient despite ongoing geopolitical uncertainties and the US-Iran conflict.
According to BERNAMA News Agency, The investment bank highlighted that although elevated energy prices and softer global sentiment may impact parts of global trade, Malaysia is likely to remain insulated due to its robust electrical and electronics sector. This includes significant contributions from artificial intelligence-related segments such as semiconductors, servers, and data-centre infrastructure.
Kenanga Investment Bank Bhd stated that structural factors are expected to maintain the current account (CA) in surplus, with forecasts predicting the CA balance to widen to 2.1 percent in 2026, up from 1.6 percent in 2025. It emphasized that ongoing capital expenditure in hyperscaler and inventory normalization across advanced economies should support export demand through 2026. Additionally, higher commodity prices are anticipated to bolster export receipts and terms of trade.
Services exports are projected to strengthen further, driven by increased tourism activity and ongoing digital infrastructure investments. Although a stronger ringgit could slightly increase imports, Malaysia's external balance is expected to remain comfortably in surplus.
Regarding the ringgit, Kenanga Investment Bank Bhd maintained its forecast of 3.95 against the US dollar, citing current macro conditions that support a stronger but range-bound ringgit rather than a significant structural decline below 3.90. The policy rate is expected to remain stable, as Bank Negara Malaysia (BNM) is likely to keep the overnight policy rate at 2.75 percent throughout 2026. The bank suggests that external uncertainties and a stronger ringgit environment will allow BNM to focus on macroeconomic stability and policy flexibility rather than pre-emptive tightening.
BNM reported that Malaysia recorded a wider current account surplus of RM15.2 billion in the first quarter of 2026, compared to RM2.7 billion in the previous quarter. This increase was driven by a larger goods surplus and a higher services surplus, supported by travel and information and communication technology receipts.