$100 Oil Prices Meet AI Computing Hardware Export Boom! Malaysian Ringgit Poised for Forex Comeback with "Dual Catalysts"

According to Zhihu Finance APP, some senior strategists in the foreign exchange market have stated that rising oil prices and the AI boom are providing positive catalysts for the Malaysian ringgit, which may see an upward movement. Although the ringgit has fallen 1.2% since September, trailing behind all other Asian currencies, MUFG Bank's latest forecast suggests that the ringgit will appreciate to 4.03 ringgit per US dollar by year-end. Sumitomo Mitsui Banking Corporation expects it to reach 4.0 ringgit per US dollar by then. As of last Friday's forex market close, the ringgit rose 0.3% to 4.0738 ringgit per US dollar.

High international oil prices and expanding AI hardware demand are providing two complementary support paths for the Malaysian ringgit—energy export income buffers external shocks, while the electronics industry exports, which are highly linked to the AI infrastructure progress, enhance foreign exchange earning capacity. The core arguments that financial institutions favor about the Malaysian ringgit focus on strong electronic product exports, capital inflows, and policy stability jointly supporting exchange rate recovery.

The key variables in the energy market remain whether transportation through the Strait of Hormuz can be restored and if US-Iran negotiations can truly reduce supply risks. Last week at the UN General Assembly, Iran’s President Pezeshkian made tough statements, and the Houthi attack on Saudi Arabia further increased market concerns about a supply disruption in the Middle East. On September 25, as news about phased de-escalation talks between the US and Iran increased, Brent crude futures fell by 2.1% but still closed at $104.32 per barrel; then, on September 27, Trump stated that he had rejected Iran’s proposal while negotiations are expected to resume this week; Iran’s Foreign Minister Araqchi emphasized that conditions would not be softened. Negotiation channels between the US and Iran remain open, but differences between passage, port blockades, and the nuclear issue mean the geopolitical risk premium in energy prices is unlikely to dissipate quickly.

The support for exports brought by the AI infrastructure boom is already reflected in Malaysia’s trade data. Official data shows that in August, goods exports increased by 45.5% year-on-year to about 191.05 billion ringgit; of this, electronics and electrical products exports grew 66.5% year-on-year to about 92.48 billion ringgit, accounting for 48.4% of total exports. The International Monetary Fund also lists Malaysia, along with China, South Korea, and Thailand, as one of the world’s four largest net exporting economies for AI-related hardware. All these mean that Malaysia can seize part of the growth in global computing investment through its crucial packaging and testing segment in the electronics manufacturing and semiconductor industry chain.

Oil Prices and AI Computing Demand Jointly Support the Ringgit’s Exchange Rate Trend

Rising oil prices may further boost this energy exporter’s income, while Malaysia’s increasingly important position in the AI supply chain also enables it to benefit from ever-growing semiconductor demand. As political risk premium related to some state elections gradually fades, strategists expect the ringgit to resume its uptrend.

Jeff Ng, Head of Asia Macro Strategy at Sumitomo Mitsui Banking Corporation in Singapore, said: “As worries about the macro environment ease, we could see the ringgit stage a rebound after a pressure relief by year-end.” He added that given Malaysia’s energy and electronics exports, and the ringgit’s correlation with a strengthening yuan, “Malaysia’s overall fundamentals remain positive.”

Driven by rising shipments of electronics including semiconductors, the country posted export growth of over 35% each month for five consecutive months through August. The average export growth for 2025 is estimated at about 6.7%. According to the International Monetary Fund, Malaysia now ranks among the world’s top four net exporters of AI infrastructure-related hardware together with South Korea, China, and Thailand.

As shown in the chart above, thanks to liquefied natural gas exports and AI infrastructure hardware exports, Malaysian bond assets saw foreign capital inflows for a second consecutive month.

MUFG Bank’s Singapore-based FX strategist Lloyd Chan said: “Malaysia’s electronics trade surplus has already been able to offset higher oil import bills.” He added that with attractive sovereign bonds and ringgit valuations, “we see room for the Malaysian ringgit to strengthen.”

According to Bank for International Settlements data, the ringgit’s real effective exchange rate is about 2% below its 20-year average. Continued capital inflows into the bond market may help support the ringgit.

Investors will be closely monitoring Thursday’s release of S&P Global Malaysia’s September Manufacturing PMI for further signs of economic expansion, as the region continues to grapple with the fallout from Middle East developments. However, as one of the world’s major LNG exporters, Malaysia’s ability to cope with rising energy costs may be superior to some other economies.

Goldman Sachs strategists, including Danny Suwanapruti, wrote in a September 18 report: “Malaysia has been on the relatively favorable side of changes in international terms of trade since the start of the year,” and is best positioned to benefit from AI investment and higher energy prices. They stated that as global central banks tilt slightly hawkish, “conditions are in place for the ringgit to outperform other currencies,” and advised going long the ringgit, short the baht. Both Thailand and Malaysia can participate in the tech export cycle, but differences in energy balances, policy expectations and capital flows may give the ringgit a relative edge.

The Ringgit’s “Dual Positive Catalysts”: Energy Shock Buffer, AI Tech Drives Forex Earnings

The market’s investment logic for the ringgit is closely tied to the “energy buffer + robust AI tech hardware exports” as dual positive catalysts. Malaysia boasts an important LNG export business, and rising energy prices can improve related export revenues, but the country also needs to import crude oil, so higher prices add to import bills and fuel subsidy pressures. Therefore, exchange rate fundamentals are determined by the net result of oil & gas export income, energy import costs, and trade surpluses in semiconductors, packaging & testing, and AI infrastructure-related electronic products. MUFG Bank points out that the electronics trade surplus helps offset the higher oil resource import bill. This also explains why being an “energy exporter” and “bearing higher oil import costs” can both be true for Malaysia.

From the perspective of AI system architecture, the agent expands a user request into consecutive tasks such as model inference, retrieval, tool invocation, code execution and results validation, so infrastructure demand covers GPU computing, CPU execution, memory capacity and bandwidth, as well as storage, high performance network infrastructure, and optical interconnect systems. As demand transmits to the hardware supply chain, Malaysia’s main beneficiaries include established electronics manufacturing, semiconductor assembly and advanced packaging, testing infrastructure, as well as ongoing upgrades in design and 2.5D/3D advanced packaging. The Malaysian Investment Development Authority has clearly listed these as key industrial upgrading priorities. For the ringgit, the truly crucial transmission chain is global AI investments turning into local orders, production, and export income, which then generates FX settlement demand; overseas compute spending itself does not automatically translate into ringgit buying interest.

Capital flow is providing an additional layer of support. According to RAM Ratings, Malaysia’s bond market saw a net foreign inflow of 15.9 billion ringgit in August and continued with a net inflow of 3.5 billion ringgit in the first 17 days of September, indicating bond assets remain attractive to overseas investors. On the policy front, Malaysia’s central bank kept the overnight policy rate unchanged at 2.75% on September 3, while highlighting caution on cost pressure and domestic demand changes. Bond valuation, policy credibility, and foreign allocation demand could enhance ringgit support, but actual exchange rate effects still depend on whether the funds are FX-hedged and other cross-border settlements.