Analyst: Malaysia may be able to withstand oil price shocks and maintain resilience, but inflation risks still exist.

Analyst Sabrina Edora from Public Investment Bank stated in a report that despite the increase in oil prices, the Malaysian economy may maintain relative resilience, but the cushion provided by commodities may not fully offset the impact of long-term external shocks. She said that strong domestic demand and favorable trade conditions may provide some support, but the increase in fuel, freight, and distribution costs may ultimately lead to broader inflation. She pointed out that the Malaysian central bank maintained its policy rate at 2.75% unchanged at its meeting in March, indicating that policymakers are prepared to ignore short-term energy fluctuations but remain vigilant against a second round of inflationary pressures. Public IB maintains its forecast for the USD/MYR exchange rate to be between 4.00 and 4.05 by the end of 2026. The USD/MYR rose by 0.5% to 3.9683.