The Financial Markets Committee (FMC) convened on Tuesday (23 June 2026) to discuss recent developments in the ringgit foreign exchange market.

Recent movements of the ringgit and regional currencies continue to be driven by global developments. While geopolitical uncertainties have partially eased following an interim peace deal signed by the US and Iran, global financial markets remained focused towards prospects of higher policy rates in the US amid elevated inflation risks.

FMC members agreed that Malaysia’s favourable macroeconomic fundamentals remain intact, as reflected in positive indicators such as the stronger than expected trade data and stable inflation. Outflows from non-resident (NR) investors were observed, but this reflected an adjustment to their portfolio allocation after the strong ringgit performance in the early part of the year. With focus turning to the announced state elections, NR investors are seen to be taking a neutral stance in their portfolio positioning. The ringgit thus went through a market correction in June, declining against the USD. This was also on the back of other global market developments, namely:

• increased hedging activities amid the stronger US dollar as markets now expect higher interest rates in the US later in the year; and
• equity rebalancing activities driven by the May MSCI index review which saw six Malaysian equities removed from the MSCI Malaysia Index.

Nevertheless, FMC members observed that the onshore FX market remains healthy. The average daily FX turnover rose to USD21.3 billion this year, compared to USD19.8 billion in 2025, driven by balanced two-way flows. Corporate FX activities remain consistent with general expectations. Looking ahead, external developments, as well as domestic factors, are expected to continue driving the ringgit performance, but Malaysia’s solid economic profile will help to provide enduring support to the ringgit.

In the meeting, BNM reiterated that it will continue to closely monitor developments in the financial markets and reaffirm its commitment to ensure orderly market conditions. Ongoing measures to encourage inflows like the Qualified Resident Investor (QRI) programme as well as engagements with government-linked companies (GLCs), government-linked investment companies (GLICs) and corporates to repatriate and convert their income remain ongoing and will be intensified.

About the Financial Markets Committee (FMC)

The FMC is a committee established by BNM in May 2016 and comprises representatives from Bank Negara Malaysia, financial institutions, corporations, financial service providers and other institutions which have prominent roles or participation in the financial markets.