Why did the ringgit strengthen? Malaysia's surplus and where the money went

How big is Malaysia’s current-account surplus?

Malaysia ran a current-account surplus of RM32.8 billion in 2025 and RM25.9 billion in the first half of 2026, compared with RM16.6 billion in the first half of 2025 (DOSM, Balance of Payments 2Q 2026, Table 1). Goods are the engine; the large deficit in primary income is the brake.

Visual guide

How big is Malaysia’s current-account surplus?

2Q 2026

• Current account+10.8
• Goods+40.7
• Services−0.7
• Primary income−27.2
• Secondary income−2.1

-27.240.7

Current account (RM billion)	2025	1H 2026	2Q 2026
Current account	+32.8	+25.9	+10.8
Goods	+105.4	+74.3	+40.7
Services	+5.3	+5.8	−0.7
Primary income	−67.3	−48.0	−27.2
Secondary income	−10.6	−6.2	−2.1

Malaysia's current-account surplus in 2025, revised (DOSM, Balance of Payments 2Q 2026, Table 1)

Two lines explain the shape. Travel, largely tourist spending, earned a net RM48.4 billion in 2025 and kept services in surplus. Investment income paid to foreign investors was RM138.5 billion against RM81.2 billion received, which is why primary income is deeply negative; direct-investment income, the profits of foreign-owned companies operating here, accounted for RM98.2 billion of those payments. In the second quarter of 2026 the surplus was about 2.0% of GDP, according to DOSM’s infographic.

Yet what did the ringgit do, quarter by quarter?

The ringgit strengthened through 2025 even though residents bought foreign securities in every quarter, and it turned weaker in mid-2026 when those purchases jumped. The quarterly averages below are calculated from BNM’s monthly middle rates (OpenDOSM).

Quarter	Current account (RM bn)	Residents’ net purchases of foreign securities (RM bn)	Ringgit per US$, quarterly average (calculated)
1Q 2025	+13.8	34.4	4.4505
2Q 2025	+2.7	22.6	4.3074
3Q 2025	+13.5	13.6	4.2252
4Q 2025	+2.7	15.9	4.1546
1Q 2026	+15.2	−1.3 (net sales)	3.9648
2Q 2026	+10.8	33.3	4.0029

The purchases column is DOSM’s portfolio investment assets with the sign reversed so that a positive number means buying. On monthly averages the ringgit went from 4.4740 in January 2025 to 3.9146 in February 2026, its strongest month of the period, and weakened to 4.0825 in July 2026. The first quarter of 2026, when residents were small net sellers of foreign securities, was the ringgit’s strongest quarter; the second, when they bought RM33.3 billion, was when it turned. That is a pattern in the data, not proof of cause.

Where did the money go, and what came in?

In 2025 residents’ outflows into foreign securities and direct investment abroad were larger than the surplus, and they were offset mainly by foreign direct investment and foreign buying of Malaysian bonds (DOSM, Table 3). DOSM presents the financial account as net flows: a plus sign is money coming in, a minus sign is money going out. For reserve assets, a minus sign means reserves increased.

Financial account (RM billion)	2025	1H 2026	What it means
Direct investment in Malaysia	+65.9	+30.2	Foreign companies investing in plants, data centres and subsidiaries here
Direct investment abroad	−12.4	−15.0	Malaysian companies investing overseas
Residents’ foreign equities	−78.6	−20.1	Malaysians and local funds buying foreign shares
Residents’ foreign debt securities	−7.8	−12.0	Buying foreign bonds
Foreign investors, Malaysian equities	−11.9	+0.3	Foreigners net selling Malaysian shares (2025), roughly flat (1H 2026)
Foreign investors, Malaysian debt securities	+38.9	+5.7	Foreigners buying Malaysian bonds
Financial derivatives	+0.2	−0.4	Settlement of derivative positions
Other investment	−10.3	+11.7	Bank loans, deposits and trade credit
Financial account, total	−16.0	+0.4	Net of all the lines above
Reserve assets	−8.4	−33.4	Reserves rose by these amounts
Net errors and omissions	−8.3	+7.0	Flows the statistics could not place

Read the 2025 column this way: RM32.8 billion came in through the current account, RM65.9 billion through direct investment and RM38.9 billion through foreign bond buying. Residents sent RM86.5 billion into foreign securities and RM12.4 billion into direct investment abroad, foreigners pulled RM11.9 billion out of Malaysian shares, and BNM’s reserve assets still rose by RM8.4 billion. In the first half of 2026 reserve assets rose by RM33.4 billion, and international reserves reached RM537.0 billion at the end of June against RM511.3 billion at the end of March (DOSM release). How large reserves are relative to short-term debt is covered in reserves and short-term debt.

What does Bank Negara Malaysia say supports the ringgit?

BNM describes a coordinated effort, started in 2024, to get government-linked companies (GLCs), government-linked investment companies (GLICs) and other corporates to bring foreign income home and convert it into ringgit. Its Financial Markets Committee said on 8 April 2024 that the efforts since 26 February focused on “investment income and export revenue which are recurring in nature”, and that FX conversion activity had risen (BNM FMC statement).

The policy was restated in 2026. On 31 March Deputy Governor Adnan Zaylani Mohamad Zahid said BNM remained committed to “repatriating income and getting the corporates to convert” (Bernama). On 24 June the Financial Markets Committee said the Qualified Resident Investor programme and engagements with GLCs, GLICs and corporates to repatriate and convert overseas income would be intensified, and reported average daily onshore FX turnover of US$21.3 billion in 2026 against US$19.8 billion in 2025 (Xinhua, The Edge).

What turned in the second quarter of 2026, and what to watch next

The financial account swung from a RM27.4 billion net inflow in the first quarter of 2026 to a RM27.0 billion net outflow in the second, driven by portfolio investment (DOSM release). Within the RM35.2 billion portfolio outflow, residents’ purchases of foreign equities were RM25.5 billion and of foreign debt securities RM7.9 billion, while foreign investors’ net selling of Malaysian securities was RM1.8 billion. The ringgit’s monthly average weakened from 3.9526 in May to 4.0778 in June. BNM’s committee said the non-resident outflows reflected portfolio adjustment after the ringgit’s strong performance early in the year (The Star, via Bloomberg).

Residents’ foreign share buying is the same flow that shapes returns for Malaysians holding US stocks; how the currency move changed those returns is in US stocks in ringgit. DOSM’s next quarterly balance of payments, for the third quarter of 2026, is scheduled for 18 November 2026. CapsWindow does not forecast exchange rates; the next release will show whether the second-quarter outflow continued, not where the ringgit will be.

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