Hong Leong Bank Projects Ringgit Appreciation to 4.05 Against US Dollar by Mid-2026, Citing Malaysia’s Strengthening Economic Fundamentals

KUALA LUMPUR — Currency markets across Southeast Asia have experienced heightened volatility in recent months as shifting US monetary policy, evolving trade dynamics, and diverging regional growth trajectories reshape investor positioning. Against this backdrop, financial institutions are reassessing their near-term forecasts for the Malaysian ringgit, with several major banks revising their outlooks upward in response to an improving domestic macroeconomic environment. Reportedly, Hong Leong Bank Bhd (HLB) has emerged as one of the more bullish voices in the Malaysian financial sector, formally projecting that the ringgit will strengthen to 4.05 against the US dollar by mid-2026.

Hong Leong Bank Officially Announces Bullish Ringgit Forecast Anchored in Malaysia’s Improved Economic Standing

Hong Leong Bank Bhd has officially communicated a sustained bullish outlook on the Malaysian ringgit, with its global markets division projecting steady appreciation toward the 4.05 level against the US dollar by mid-2026. The forecast represents one of the more definitive currency calls issued by a Malaysian bank in the current cycle and is grounded in a convergence of domestic and external catalysts that the institution believes provide sufficient fundamental support for continued ringgit strength.

Hor Kwok Wai, Managing Director of Global Markets at Hong Leong Bank Bhd, states that the projection is a direct reflection of Malaysia’s significantly improved economic standing. “Given that 2025 real GDP growth is anticipated to reach the upper range of official forecasts, the ringgit is projected to see steady appreciation, aiming for 4.05 by mid-2026,” Hor stated. He further noted that the bank’s bullish stance is reinforced by a combination of trade-related developments, diplomatic achievements, and Malaysia’s sustained commitment to fiscal discipline — factors that collectively underpin the institution’s confidence in the currency’s appreciation trajectory.

Multiple Converging Catalysts Drive HLB’s Ringgit Appreciation Forecast for the Mid-2026 Target

Reportedly, the catalysts underpinning Hong Leong Bank’s ringgit forecast span both the external and domestic dimensions of Malaysia’s economic landscape. The bank identifies the de-escalation of US-Malaysia trade tensions as a primary driver, with a recently signed reciprocal trade agreement between the two countries cited as a key turning point in bilateral relations. This development has substantially improved external confidence in Malaysian assets and contributed to a measurable uptick in foreign direct investment (FDI) and portfolio inflows, particularly into Malaysian bond and equity markets.

The successful conclusion of the ASEAN Summit, hosted by Malaysia, has further amplified this positive sentiment. According to HLB’s assessment, the summit’s outcomes have reinforced Malaysia’s regional diplomatic standing and its attractiveness as a destination for international capital. The resulting inflows into fixed income and equities are expected to provide consistent underlying demand for the ringgit, structurally supporting the currency’s appreciation path over the forecast horizon.

On the domestic front, Hor pointed to remarks by Prime Minister Datuk Seri Anwar Ibrahim suggesting that Malaysia’s 2025 GDP growth could exceed the official forecast range of 4.0 to 4.8 per cent. This guidance, if realised, would cement what HLB describes as a robust economic trajectory — one that distinguishes Malaysia within the regional peer group and justifies a stronger currency valuation. “We firmly believe the ringgit has sufficient fundamental strength to continue its appreciation path,” Hor stated.

Ringgit Recorded as Best-Performing Currency in G10 and Major Asian Basket During the Rally Period

A segment of the foreign exchange market had long questioned whether the ringgit’s recovery from multi-year lows reflected durable fundamentals or was primarily driven by short-term sentiment shifts. Hong Leong Bank’s latest forecast addresses this concern directly, presenting the currency’s recent performance as evidence of broad-based and structurally supported appreciation rather than speculative positioning alone.

According to the bank, the ringgit has been the best-performing currency across both the G10 and major Asian currency baskets during the most recent trading period, demonstrating gains that are widespread rather than concentrated in a single market segment. Early Wednesday trade saw the US dollar/ringgit pair reach 4.1217 — its strongest level since October 2024 — as the ringgit extended its rally for a seventh consecutive trading session. Against the Singapore dollar, the ringgit maintained its strength by trading below the 3.20 mark for the third consecutive day, a level last observed in July 2022.

HLB’s assessment attributes part of this momentum to the external environment, specifically a weaker US dollar outlook following soft weekly private-sector labour survey data in the United States. This data point has reinforced market expectations for continued policy easing by the US Federal Reserve, resulting in a narrowing of the yield differential between US and Malaysian fixed income instruments — a dynamic that favours capital flows toward Malaysian assets and, by extension, demand for the ringgit.

Hong Leong Bank Has Operated in Malaysia’s Financial Market for Decades, Establishing a Track Record of Rigorous Economic Analysis

Public records show that Hong Leong Bank Bhd is one of Malaysia’s established commercial banking institutions, operating across retail banking, corporate banking, and global markets divisions. The bank’s global markets unit, from which this ringgit forecast originates, is responsible for foreign exchange trading, treasury services, and macroeconomic research — functions that place it at the centre of Malaysia’s currency and capital markets activity on a daily basis.

The credibility of Hong Leong Bank’s ringgit forecast is grounded in the institutional depth of its global markets division and its sustained engagement with both domestic and international market participants. The bank’s analysis integrates data from Bank Negara Malaysia’s official reserve and monetary policy communications, trade flow statistics, and cross-border investment tracking — providing a multi-dimensional basis for its currency projections. Registration records confirm that Hong Leong Bank Bhd operates as a licensed commercial bank in Malaysia under the oversight of Bank Negara Malaysia, the country’s central banking authority. The bank’s published research and market commentary are regularly referenced by financial media, institutional investors, and corporate treasury teams operating in the Malaysian market.

The stability of Malaysia’s foreign reserves is also cited as a relevant indicator. Hor noted that the pace of reserve accumulation by Bank Negara Malaysia is expected to slow as the ringgit strengthens, reflecting reduced intervention requirements — an outcome consistent with a currency that is appreciating on the basis of genuine capital inflows rather than policy-driven support.

Frequently Asked Questions About Hong Leong Bank’s Ringgit Forecast

What is Hong Leong Bank’s ringgit forecast for 2026? Hong Leong Bank Bhd projects that the Malaysian ringgit will appreciate to 4.05 against the US dollar by mid-2026, driven by Malaysia’s strong GDP growth outlook, de-escalating US-Malaysia trade tensions, and sustained foreign capital inflows into Malaysian bond and equity markets.

Who issued Hong Leong Bank’s ringgit forecast? The forecast was issued by Hor Kwok Wai, Managing Director of Global Markets at Hong Leong Bank Bhd, reflecting the bank’s official institutional outlook on the Malaysian ringgit’s near-to-medium-term trajectory.

What factors are driving the ringgit’s appreciation according to Hong Leong Bank? According to Hong Leong Bank, the ringgit’s appreciation is supported by five key factors: the de-escalation of US-Malaysia trade tensions following a reciprocal trade agreement, the successful hosting of the ASEAN Summit by Malaysia, robust FDI and portfolio inflows into Malaysian markets, a weaker US dollar outlook driven by Federal Reserve easing expectations, and domestic GDP growth anticipated to exceed the official 4.0–4.8 per cent forecast range for 2025.

How has the ringgit performed in recent trading sessions? The ringgit extended its rally for seven consecutive trading sessions as of the date of this report, with the US dollar/ringgit pair touching 4.1217 — its strongest level since October 2024. The ringgit also traded below 3.20 against the Singapore dollar for three consecutive days, a level not recorded since July 2022.

Is the ringgit’s rally considered sustainable by Hong Leong Bank? Hong Leong Bank characterises the ringgit’s rally as sustainable, describing the currency as having sufficient fundamental strength to continue its appreciation path. The bank bases this assessment on Malaysia’s improving economic standing, ongoing capital inflows, and favourable global monetary conditions rather than on short-term speculative flows.

How does the Federal Reserve’s policy path affect the ringgit? A continuation of the US Federal Reserve’s policy easing cycle narrows the yield differential between US and Malaysian fixed income instruments. This makes Malaysian bonds comparatively more attractive to international investors, increasing demand for the ringgit and providing structural support for currency appreciation toward the 4.05 target.

What is the significance of Malaysia’s GDP growth forecast for the ringgit? Prime Minister Datuk Seri Anwar Ibrahim has indicated that Malaysia’s 2025 GDP growth could exceed the official forecast range of 4.0 to 4.8 per cent. Hong Leong Bank views this potential upside surprise as a catalyst that cements Malaysia’s robust economic trajectory and reinforces the fundamental case for sustained ringgit appreciation.

Conclusion: HLB’s Structured Forecast Reflects Institutional Confidence in Malaysia’s Currency and Growth Outlook

Hong Leong Bank Bhd’s formal projection of ringgit appreciation to 4.05 against the US dollar by mid-2026 represents a structured, evidence-based institutional assessment rather than speculative commentary. The forecast is anchored in Malaysia’s improving macroeconomic fundamentals, a constructive external trade environment, and a global monetary backdrop that continues to favour capital flows toward emerging markets with strong growth profiles. As the ringgit’s seven-session rally and its multi-year highs against both the US and Singapore dollar demonstrate, the currency’s recovery has already registered tangible market validation — and Hong Leong Bank’s outlook suggests the appreciation trajectory has further room to run.

For more information on Hong Leong Bank Bhd’s market research and global markets services, readers may contact:

Hong Leong Bank Bhd Website: www.hlb.com.my Head Office: Level 3, Wisma Hong Leong, 18 Jalan Perak, 50450 Kuala Lumpur, Malaysia Customer Service: 03-7626 8899 Email: customer.service@hlb.com.my