Ringgit rally and fiscal strength fuel Malaysia's bond momentum

Malaysia's improving fiscal outlook, moderating inflation and resilient currency are enhancing the appeal of its bonds, positioning them for continued gains into 2026.

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Global funds poured about US$1.3 billion (S$1.7 billion) into Malaysia's corporate and government bonds in November, the largest inflows since May, data compiled by Bloomberg shows. Citigroup, Fidelity International and State Street Investment Management are among the major institutions voicing confidence in these assets.

Such views underscore Malaysia's steady momentum, setting it apart from Southeast Asian peers weighed down by political turbulence and fiscal concerns. Despite US tariff pressures, deficits remain contained and the ringgit continues to rally. Strong domestic demand and an anticipated export recovery after a US trade deal also position the Malaysian economy for growth.

"It's difficult to find any negatives in Malaysia's fundamental story right now," said Mr Rohit Garg, a strategist at Citigroup, explaining the firm's overweight position in the country's bonds and currency. "Good steps in terms of fiscal consolidation enhance its macro attractiveness."