Malaysia’s financial markets remain resilient amid global uncertainty, buoyed by foreign inflows from exporters and investors, according to Bank Negara Malaysia’s Financial Markets Committee (FMC).
In a statement, the committee said that inflows from exporters and foreign direct investment have helped offset outflows from domestic importers, supporting overall market stability.
“Malaysian markets continue to demonstrate resilience during this period of global uncertainty, but we remain mindful of the risks posed by a prolonged conflict,” the FMC said following its meeting on March 10.
The committee noted that while global uncertainties—such as tariffs and ongoing conflicts—have increased, domestic financial markets have stayed relatively stable.
Ringgit and Bond Market Performance
The ringgit has strengthened 2.5% year-to-date (YTD) as of March 9, 2026, despite a 1.8% decline against the US dollar since February, reflecting investors’ moves into safe-haven assets amid the Middle East conflict. At the time of the statement, the ringgit was trading at 3.9260 against the US dollar, compared with 4.05 at the start of the year.
Meanwhile, the benchmark 10-year Malaysian Government Securities (MGS) yields rose 11 basis points, in line with global bond movements, but remain near historical lows. The FBM KLCI also showed resilience, recording only a 2.5% decline.
The onshore foreign exchange market has remained robust, with an average daily trading volume of US$21.4 billion (RM84.04 billion) YTD, compared to US$19.8 billion in 2025.
Demand for government bonds remains healthy, with MGS yields relatively anchored. Recent auctions recorded a strong average bid-to-cover (BTC) ratio of 2.7 times, supported by both domestic and foreign participation. Non-resident holdings of MGS have increased by RM920 million YTD, stabilising at 21.2%.
Equity Market and Investor Sentiment
The domestic equity market has attracted RM1.5 billion of non-resident inflows YTD. The FMC said positive investor sentiment and ringgit strength are expected to continue through 2026.
The committee also highlighted Bank Negara’s ongoing initiatives, including the Qualified Resident Investor (QRI) programme and engagement with government-linked companies (GLCs), investment companies (GLICs), and corporates. These efforts are expected to support consistent two-way flows into Malaysia’s markets.
“With Malaysia’s encouraging growth prospects and ongoing structural reforms, these initiatives will provide enduring support for the domestic financial markets,” the FMC said.
