Commerzbank’s Moses Lim highlights stronger-than-expected Malaysian industrial production, driven by electronics and export-oriented manufacturing, with mining weakness seen as temporary. The bank notes that USD/MYR has fallen to levels last seen in 2018, supported by foreign inflows and robust semiconductor exports, and is expected to trade in a 3.90–4.00 range near term.

Stronger IP and capital inflows

"December industrial production rose more than expected by 4.8% yoy (Bloomberg consensus: 4.5%) vs 4.3% in November."

"The mining sector fell 5.2% yoy vs +2.3% in November, marking the first contraction since May 2025. This was due to softer production of natural gas. However, it is expected to recover in 2026 as more production facilities become available following the conclusion of the maintenance cycle."

"In FX, USD-MYR fell 0.3% to around 3.92 yesterday. The pair has remained near the lowest level since July 2018 as foreign investor inflow rose on brighter economic growth outlook and strong semiconductor exports. In the near term, USD-MYR could stay within the range of 3.90-4.00."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)