Kuala lumpur: The ringgit remained broadly stable against the currencies of major trading partners in the second quarter (2Q) of 2026, amid evolving global financial conditions, particularly the shift in market expectations due to the direction of United States monetary policy, said Bank Negara Malaysia (BNM).
According to BERNAMA News Agency, the central bank reported that the local note's nominal effective exchange rate (NEER) stood at -0.8 per cent in 2Q 2026 compared to 1.4 per cent in 1Q 2026. On a year-to-date basis as of August 12, 2026, the ringgit recorded a relatively stable performance against the US dollar (-0.9 per cent) and the currencies of major trading partners (NEER: -1 per cent). The NEER considers movements of the ringgit against a basket of currencies.
The central bank attributed the ringgit's stability to Malaysia's strong domestic fundamentals and sustained growth momentum. Looking ahead, BNM noted that while external factors will continue to influence exchange rate movements, Malaysia's firm economic prospects and ongoing structural reforms are expected to provide enduring support to the ringgit.
In addition to the exchange rate developments, BNM highlighted that credit growth was driven by expansion in both outstanding corporate bonds and business loans. It noted that financing remained available to support economic activity and business needs. Credit to the private non-financial sector grew by 6.4 per cent during 2Q 2026 from 5.6 per cent in 1Q 2026, with outstanding corporate bonds expanding by 8.1 per cent from 5.9 per cent in 1Q 2026. This reflected higher bond issuances, mainly in the utilities sector and for working capital purposes.
Furthermore, the central bank reported that outstanding business loans grew by 7.2 per cent in 2Q 2026 from 5.7 per cent in 1Q 2026 across both working capital and investment-related purposes, driven mainly by loans to non-small and medium enterprises (SMEs). Meanwhile, SME loans grew by 4.2 per cent, amid sustained demand for working capital.
For households, loans expanded by 5.3 per cent amid stable loan growth for the purchase of houses. BNM emphasized that financial institutions continue to support SMEs facing temporary financial difficulties through repayment assistance, financing restructuring, and tailored advisory services. Moreover, targeted support is available for viable SMEs affected by disruptions arising from the conflict in West Asia via the SME Stabilisation Relief Facility.
As of August 7, 2026, RM2.8 billion in financing has been approved, benefiting more than 4,900 SME accounts. Additionally, SMEs can utilize the RM10 billion BNM-CGC Guarantee Scheme to strengthen resilience and competitiveness for the future.