Malaysian ringgit, stocks hit highest since 2018 on AI, growth

SINGAPORE, 8 AUGUST 2026 —

The Malaysian ringgit and stocks have reached their highest levels since 2018, driven by growing confidence in the country's role in the artificial intelligence (AI) supply chain and a strengthening economic outlook. The ringgit appreciated as much as 1% to RM3.9678 per US dollar, its strongest level since May 2018, while the FTSE Bursa Malaysia KLCI Index (FBM KLCI) rose as much as 1.2%. This surge in Malaysian assets comes as the country is expected to continue its growth momentum in 2026, supported by resilient domestic demand, strong tourist arrivals, and a rapid expansion in the data-centre sector.

The outlook for the ringgit remains positive, with strategists predicting further gains for the currency. A strategist at Oversea-Chinese Banking Corp sees the ringgit potentially strengthening toward the RM3.9650 level, supported by gains in the yuan and yen. Meanwhile, Gama Asset Management SA expects the currency to rise to RM3.9 per dollar this quarter. These predictions are based on factors such as tech exports, foreign direct investment, and Bank Negara Malaysia's decision to keep interest rates unchanged this year. According to Goldman Sachs strategists, including Danny Suwanapruti, these factors will help the ringgit outperform its Southeast Asian peers in 2026.

The return of foreign investors has also given a boost to Malaysian equities. Global funds have bought US$256 million of local stocks on a net basis this month, the most among emerging regional peers. This influx of foreign investment has helped to lift the FBM KLCI gauge to its highest level since 2018. According to Tareck Horchani, head of prime brokerage dealing at Maybank Securities in Singapore, Malaysia's steady fiscal trajectory and stable economic growth have made it an attractive destination for foreign investment, particularly in infrastructure, financial services, and renewable energy. Banking stocks have been the main driver for the index, with the Bursa Malaysia Finance Index advancing as much as 1.7% to a fresh record high.

The surge in Malaysian assets is part of a broader trend in emerging markets, where a selloff in the dollar has sparked a rally in local currencies and stocks. As concerns over joint intervention continue to weigh on the dollar, investors are seeking out alternative destinations for their funds. Malaysia, with its strong economic fundamentals and attractive investment opportunities, is well-positioned to benefit from this trend. According to Horchani, the country's stable economic growth and attractive investment opportunities make it an ideal destination for foreign investors.

The impact of the ringgit's appreciation and the surge in Malaysian stocks will be closely watched in the coming weeks. With a number of key economic events scheduled for this week, including Singapore's industrial production, China's industrial profits, and Australia's Q4/December CPI, investors will be looking for signs of continued growth and stability in the region. The Philippines' trade data, Q4 GDP, and Thailand's trade data will also be closely watched, as will Taiwan's Q4 GDP and China's manufacturing PMI. These events will provide further insight into the health of the regional economy and the prospects for Malaysian assets.

As the Malaysian economy continues to grow and attract foreign investment, the country is likely to remain a key player in the regional economy. With its strong fundamentals and attractive investment opportunities, Malaysia is well-positioned to benefit from the ongoing trends in emerging markets. According to Kwan, the ringgit's prospects are closely tied to the country's role in the AI supply chain, and its ability to attract foreign investment in key sectors such as data centres and tourism. As the country continues to develop its economy and attract foreign investment, the ringgit is likely to remain a top performer among Southeast Asian currencies.

In the coming months, investors will be watching closely to see if the Malaysian economy can continue its growth momentum. With the ringgit and stocks at their highest levels since 2018, there is a sense of optimism about the country's prospects. However, there are also potential risks and challenges that need to be addressed, including the impact of global economic trends and the potential for volatility in financial markets. As the Malaysian economy continues to evolve and grow, it is likely to remain a key destination for foreign investors and a major player in the regional economy. Details not yet available on the potential impact of these trends on the broader Malaysian economy, but it is clear that the country is well-positioned for continued growth and development in the coming months.

Related: Maybank · Bank Negara Malaysia · Singapore