Malaysia: State polls in focus, macro backdrop still constructive

Research evidence excerpt

Malaysia: State polls in focus, macro backdrop still constructive

Economics Research

22 June 2026 | 11:23AM SGT

Bottom line: Political news flow may keep MYR choppy in the near term, particularly Chris Poh

+65-6889-3454 | chris.poh@gs.com

around the state elections calendar. That said, Malaysia’s macro backdrop remains Goldman Sachs (Singapore) Pte

supportive, with the current account, export momentum and flow picture still Danny Suwanapruti

constructive. We therefore retain an appreciation bias for MYR. +65-6889-1987danny.suwanapruti@gs.com|

Goldman Sachs (Singapore) Pte

Main points: Andrew Tilton

+852-2978-1802 |

andrew.tilton@gs.com

1. The Malaysian ringgit had been one of Asia’s better-performing currencies for Goldman Sachs (Asia) L.L.C.

most of 2026. However, it has since depreciated by close to 4.2% month-to-date,

underperforming regional peers (Exhibit 1). The move appears to have been

driven less by a deterioration in Malaysia’s macro fundamentals and more by a

rise in domestic political risk premium, following the dissolution of the Johor and

Negeri Sembilan state assemblies and earlier remarks by Prime Minister Anwar

Ibrahim that a snap election this year could be possible if the unity government

fractures. If it occurs, it would come roughly two years before the next general

election is due.

2. In the past two years, Malaysia has benefited from a relatively stable policy

environment. A commitment to fiscal consolidation helped improve investor

confidence and attract strong portfolio and direct investment inflows. In 2025,

the ringgit was the best performing currency in the region. A return to coalition

instability could potentially put part of that premium at risk, even if macro

fundamentals remain supportive.

3. The state election calendar is now in focus.