Malaysia: Export surge and inflows lift MYR – Commerzbank

Commerzbank analysts Charlie Lay and Moses Lim note that Malaysia’s January exports surged 19.6% year‑on‑year, led by electronics and optical equipment, with authorities expecting more moderate but positive growth in 2026. Political risks are rising as coalition tensions build, yet foreign portfolio inflows have turned strongly positive. USD/MYR fell on the day and week, leaving MYR up 4% versus the Dollar year‑to‑date.

Electronics‑led exports and stronger Ringgit

"January exports rose more than expected by 19.6% yoy (Bloomberg consensus: 14.6%) vs 10.2% in December, the strongest reading since September 2022. This was driven by high-value manufactured products like electronics and optical equipment. The Malaysia External Trade Development Corporation (Matrade) stated that the strong export performance underscored the “resilience and global competitiveness of Malaysian exporters”. Nonetheless, this pace of growth will likely moderate in the coming months."

"On the politics front, the governing coalition is facing greater scrutiny. The liberal Democratic Action Party (DAP), the largest party in the ruling bloc, is considering moving its cabinet ministers to the backbenches. This move reflects waning support for Prime Minister Anwar Ibrahim amid lacklustre reform progress."

"In FX, USD-MYR fell 0.2% to 3.90 last Friday and declined 0.1% for the week. Foreign portfolio inflows remained robust amid a positive growth outlook. On a net basis, foreign portfolio inflows rose to USD355mn this year compared to USD885mn outflow for the same period last year. Year-to-date, MYR is up 4.0% vs the USD."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)