Kuala lumpur: Malaysia's robust economic outlook and ongoing reform efforts are anticipated to provide consistent support to the ringgit, with external factors continuing to influence exchange rate movements, as stated by Bank Negara Malaysia (BNM).
According to BERNAMA News Agency, the central bank highlighted that the ringgit appreciated against the currencies of Malaysia's major trading partners in the first quarter of 2026 (1Q 2026), evidenced by a 1.4 percent nominal effective exchange rate (NEER) appreciation. Despite the strengthening of the US dollar due to the onset of the West Asia conflict and risk-off sentiment, the ringgit rose by 0.5 percent against the dollar during this period.
"The ringgit's appreciation was driven by Malaysia's strong domestic fundamentals and growth momentum, along with continued non-resident inflows into domestic markets. Despite some volatility following the West Asia conflict and reduced expectations for United States Federal Reserve policy rate cuts, the ringgit has performed well on a year-to-date basis, appreciating by 3.3 percent against the US dollar and 2.9 percent on a NEER basis as of May 13, 2026," BNM noted.
BNM reaffirmed its commitment to closely monitoring global developments to ensure the orderly functioning of the domestic foreign exchange market. Additionally, the central bank reported robust credit growth to the private non-financial sector, which rose to 5.6 percent in 1Q 2026, up from 5.3 percent in 4Q 2025, driven by increased growth in outstanding loans, particularly among businesses.
Business loans saw an expansion of 5.8 percent in 1Q 2026, primarily due to higher loan growth among non-small and medium enterprises (SMEs), while SME loan growth remained stable at 6.0 percent. For households, loan growth held steady at 5.4 percent in 1Q 2026, with consistent loan growth across most purposes.
"Growth in outstanding corporate bonds moderated to 5.8 percent in 1Q 2026, amid lower issuances during the quarter," BNM stated. The banking sector continues to provide support through tailored measures aimed at offering cash-flow relief, sustaining business continuity, and preserving long-term financial viability.
Financial institutions are offering repayment flexibility, financing restructuring, and advisory services to assist customers and SMEs with cash flow challenges. Additionally, borrowers can seek assistance via the Debt Management Programme and Small Debt Resolution Scheme provided by the Credit Counselling and Debt Management Agency.
The RM5 billion SME Stabilisation Relief Facility (SME SRF) is now open for applications through participating financial institutions, offering timely working capital support to viable SMEs affected by the ongoing West Asia conflict and efforts to bolster long-term SME resilience through structural reforms.
Furthermore, BNM is collaborating with the Credit Guarantee Corporation Malaysia Bhd (CGC) to introduce a RM10 billion guarantee scheme. This initiative includes six portfolio guarantee schemes focusing on financial inclusion, climate and sustainability, productivity, and resilience, and will be available to SMEs starting June 1, 2026. Further details on the scheme will be announced in due course.