The Ringgit Is No Longer an Emerging Market Currency. It Is a Regional Macro Hedge.
As global macro stress deepens, Juwai IQI Chief Global Economist Shan Saeed argues that the Malaysian ringgit has undergone a structural upgrade that most market participants have not yet fully priced — and that the rest of ASEAN is being sorted into a hierarchy it did not choose.
BY TENGKU NOOR SHAMSIAH TENGKU ABDULLAH | TNS NEWS
KUALA LUMPUR, April 22 – In the global foreign exchange market of 2026, not all currencies are created equal. Some absorb shocks. Others amplify them. And in Asia, the gap between the two is widening at a pace that is forcing a fundamental rethink of how the region’s currencies are classified, priced and held.
That is the central argument of Shan Saeed, Chief Global Economist at Juwai IQI, whose latest analysis of the Malaysian ringgit makes a striking claim: that the currency has crossed a structural threshold — and that global capital markets are only beginning to price what that means.
The FX regime of 2026, in Shan’s framework, is no longer liquidity-driven. It is, as he describes it, “credibility-ranked and risk-calibrated”, with currencies being repriced through three filters he considers non-negotiable: energy positioning, policy discipline and capital-flow resilience.
The ringgit, he argues, is passing all three. Most of its ASEAN peers are not.
“The ringgit is not merely participating — it is emerging as ASEAN’s most effective absorber of global macro stress.”
— Shan Saeed, Chief Global Economist, Juwai IQI
A New Framework for Currency Risk
Central to Shan’s analysis is a proprietary framework he calls the Global Macro Risk Index (GMRI) — a tool that tracks macro stress transmission across five channels simultaneously: energy markets, financial conditions, geopolitics, inflation dynamics and the liquidity environment. The index is currently operating in what he terms a Stress Regime, registering approximately 62–68 on his scale.
In such an environment, he argues, the conventional logic of currency investing breaks down. Yield differentials, which drive capital flows in benign conditions, become secondary. What capital seeks instead is shock-absorption capacity — the ability of an economy and its currency to withstand external pressure without amplifying it.
In a Stress Regime, Shan contends, “capital does not chase yield — it seeks shock absorbers.”
Malaysia, by his assessment, aligns constructively across all five GMRI transmission channels. As a net energy exporter, it benefits from elevated oil prices rather than suffering from them. Inflation remains among the most contained in ASEAN at approximately 1.5–2.5%. Monetary policy under Bank Negara Malaysia is rules-based and credible, compressing risk premia. Domestic liquidity conditions remain stable. And Malaysia’s strategic position within Asian trade corridors provides a structural advantage at a time when those corridors are being actively reconfigured.
The conclusion Shan draws is direct:
“The ringgit is no longer a passive EM currency — it is functioning as a regional hedge against global macro stress.”
The Data Behind the Move
Shan’s structural argument is grounded in a macro data configuration he describes as a rare and powerful alignment.
MYR recovery: +8–10% from 2024 lows — top-tier Asia FX rebound
Current account: ~2–3% of GDP surplus — durable external buffer
Inflation: ~1.5–2.5% — among ASEAN’s most contained
GDP growth: ~4–5% — stable, non-inflationary expansion
Together, these indicators represent what Shan describes as “a rare alignment of external strength, price stability and growth continuity” — precisely the configuration that global capital allocates to in a high-GMRI world, where each element reinforces the others.
On the FDI side, sustained inflows into electronics and electrical manufacturing, data centres and advanced manufacturing are adding a durable capital-account dimension to what was previously a current-account story — deepening the structural case for ringgit appreciation over the medium term.
This is not, Shan emphasises, momentum-driven appreciation. It is, in his words, “a volatility-adjusted repricing of Malaysia’s macro credibility” — a distinction with significant implications for how long the move is likely to last.
Shan Saeed’s GMRI framework ranks the Malaysian ringgit as ASEAN’s leading macro stress absorber amid rising global volatility.
The ASEAN Sorting Cycle
The ringgit’s outperformance becomes clearer in comparison with its regional peers. Shan’s analysis maps the ASEAN currency landscape in detail, revealing what he describes as deepening structural divergence.
The Indonesian rupiah, while supported by resilient GDP growth of around 5–6%, is experiencing mild depreciation of 2–4% against the dollar and faces elevated portfolio-flow volatility. Its stability, in Shan’s assessment, is “engineered — not market-led”: the product of central-bank intervention rather than underlying structural strength.
The Thai baht faces more visible stress, depreciating 3–6%, with weakness rooted in structural oil-import dependence that makes it highly sensitive to energy shocks. In Shan’s framework, it qualifies as a “high GMRI beta currency” — one that amplifies rather than absorbs macro volatility.
The Philippine peso faces a different but equally constraining set of pressures: a persistent current-account deficit of approximately 3–4% of GDP and higher inflation sensitivity that limits resilience during stress regimes.
The Vietnamese dong remains relatively stable through active exchange-rate management, although Shan notes that such stability comes at the cost of limited upside capture.
“This is not an ASEAN rally. It is a GMRI-driven repricing of credibility, resilience and macro discipline. The ringgit is no longer part of the ASEAN FX complex — it is redefining the hierarchy.”
— Shan, Juwai IQI
His GMRI-based ranking for 2026 places the ringgit first as a stress absorber, the Vietnamese dong second as a managed stability anchor, the Indonesian rupiah third as intervention-supported, the Philippine peso fourth as structurally constrained, and the Thai baht fifth as a stress amplifier in high-volatility regimes.
The divergence, Shan argues, is structural rather than cyclical. Global capital is reallocating accordingly: stress absorbers attract inflows, stress amplifiers face depreciation pressure, and resilience increasingly outweighs carry.
Malaysia, in his assessment, sits squarely on the right side of those dynamics.
The Price Band and Its Boundaries
On the ringgit’s near-term trajectory, Shan identifies three zones within the 3.90–4.11 consolidation band.
The 3.90–4.00 range reflects GMRI stabilisation, accelerating capital inflows and a softer US dollar environment.
The 4.00–4.11 range represents his base case under stable macro conditions.
A break above 4.15 would signal GMRI escalation — triggered by an energy shock, acute geopolitical stress or a broad global risk-off event.
The band reflects a disciplined balance between external dollar dynamics and strengthening domestic fundamentals — one Shan sees as durable precisely because it is rooted in structural factors rather than sentiment or positioning.
From EM Currency to Regional Macro Asset
Shan’s overarching conclusion is that the ringgit has undergone a structural upgrade that markets are only beginning to internalise.
It has transitioned, in his framing, from a commodity-linked emerging market currency to a credibility-driven macro asset that functions as a regional stress hedge.
It is, as he puts it, “no longer reacting to volatility — it is absorbing and pricing regional risk.”
For Malaysia, the implications extend beyond currency markets. A ringgit that attracts capital as a safe harbour within ASEAN strengthens the country’s positioning as a preferred destination for long-term investment — in manufacturing, infrastructure and the digital economy — at a moment when global supply chains are being redrawn.
“Facts remain in vogue. Markets reward foresight — not consensus.”
— Shan, Juwai IQI
In Shan’s framework, the data has already delivered its verdict on the ringgit. The remaining question is not whether the structural re-rating is justified — but how long it takes the rest of the market to recognise it.
Today (April 22), the ringgit opened almost flat against the US dollar, trading around 3.9495/9570, as market caution prevailed due to the extension of the US-Iran ceasefire. The local note is expected to maintain a narrow range between 3.94 and 3.96 today.
- TNS NEWS
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