Malaysia's Financial Market To Remain Resilient, Supportive Of Economic Activity - MoF

KUALA LUMPUR, Oct 9 (Bernama) -- Malaysia's financial market is expected to remain resilient and supportive of economic activity, with the continuous role played by the banking system and capital market in meeting financing needs.

The Ministry of Finance (MoF), in its Economic Outlook 2027 report released today, said the banking sector continues to meet the financing needs of businesses and households, while the capital market provides market-based funding to drive business expansion and productive investment.

"The current monetary policy stance remains consistent with the outlook for price stability and sustainable economic growth," said the ministry, noting that Bank Negara Malaysia's (BNM) Monetary Policy Committee (MPC) maintained the Overnight Policy Rate (OPR) at 2.75 per cent in the first nine months of 2026, unchanged since the 25 basis points reduction in July 2025.

It said the banking system remained resilient to withstand adverse shocks, sustaining the provision of credit to households and businesses, underpinned by strong capital buffers and sufficient liquidity.

MoF said household financing is expected to be supported by stable labour market conditions, sustained household spending and income-related policy measures, including the implementation of phase two of the salary adjustment under the Public Service Remuneration System (SSPA).

On Malaysia's capital market, the ministry said the domestic capital market is expected to continue supporting public and private sector financing.

It said corporate fundraising is anticipated to remain favourable, underpinned by financing for business expansion and investment, particularly across infrastructure, construction, utilities and technology-related activities.

Meanwhile, the ongoing development of Islamic finance is further broadening financing and investment opportunities, reinforcing the depth and diversity of the domestic financial ecosystem.

Strong Economic Position, Structural Reforms Provide Support to Ringgit

On the ringgit's performance, it strengthened in early 2026, appreciating by 4.3 per cent against the US dollar over the first two months of the year; however, the positive momentum was subsequently reversed following escalation of the West Asia conflict at the end of February 2026, with the ringgit depreciating by 3.3 per cent against the US dollar at the end of August 2026.

Nevertheless, on a year-to-date basis, the ringgit appreciated by 0.9 per cent against the US dollar as at end-August 2026, while strengthening against most major and regional currencies, including the euro (1.7 per cent), Japanese yen (3.0 per cent), Philippine peso (6.7 per cent), Indonesian rupiah (6.6 per cent) and Thai baht (5.1 per cent).

"Despite external headwinds, Malaysia's strong economic position and ongoing structural reforms have sustained market confidence, providing underlying support to the ringgit," said MoF.

Capital Market Initiatives Keep FBM KLCI Vibrant, Competitive

On FBM KLCI, the MoF said ongoing capital market initiatives, including measures under the Capital Market Masterplan 2026-2030 such as the MY Value Up Programme as well as enhancements to the FBM KLCI and FBM70 indices are set to strengthen market vibrancy and competitiveness.

"The expansion of the FBM KLCI from 30 to 50 constituents to be implemented in phases from December 2026 to June 2027 will broaden coverage of Main Market capitalisation and improve sectoral representation," it said.

In addition, the ministry said the market segmentation review will strengthen clarity in the public market, enhance listing quality, and provide a more structured pathway for companies to progress from the ACE Market to the Main Market.

-- BERNAMA