Malaysia's External Position To Stay Resilient Amid Geopolitical Uncertainty -- Kenanga Investment
KUALA LUMPUR, May 15 (Bernama) -- Malaysia’s external position should remain resilient despite heightened geopolitical uncertainty and the ongoing US-Iran conflict, said Kenanga Investment Bank Bhd.
It said that while elevated energy prices and softer global sentiment might weigh on parts of global trade, Malaysia should remain relatively insulated given continued strength in the electrical and electronics sector, particularly artificial intelligence-related segments such as semiconductors, servers and data-centre infrastructure.
“Structural tailwinds should keep the current account (CA) firmly in surplus, with our CA balance forecast set to widen to 2.1 per cent in 2026 (2025: 1.6 per cent),” it said in its “Malaysia First Quarter 2026 (1Q 2026) Balance of Payments” research note today.
The investment bank said ongoing hyperscaler capital expenditure and inventory normalisation across advanced economies should continue supporting export demand into 2026.
Meanwhile, it said higher commodity prices may also support export receipts and terms of trade.
“Services exports are expected to strengthen further, driven by improving tourism activity and continued digital infrastructure investment.
“Although a firmer ringgit may moderately lift imports, we expect Malaysia’s external balance to remain comfortably in surplus,” it said.
As for the ringgit, the investment bank maintained its forecast of 3.95 against the US dollar, as current macro conditions still support a stronger but range-bound ringgit regime rather than a sustained structural break materially below 3.90.
It said policy rate would likely be stable, with the expectation that Bank Negara Malaysia would maintain the overnight policy rate at 2.75 per cent throughout 2026.
“External uncertainty and a firmer ringgit environment should allow BNM to prioritise macroeconomic stability and preserve policy flexibility rather than pursue pre-emptive tightening,” it added.
BNM today reported that Malaysia recorded a wider current account surplus of RM15.2 billion in 1Q 2026, compared with RM2.7 billion in the previous quarter, driven by a larger goods surplus and a higher services surplus supported by travel and information and communication technology receipts.
-- BERNAMA