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Commerzbank’s Moses Lim notes Malaysia’s July exports rose 38.0% year-on-year, marking a fourth month of double‑digit growth led by electronics and machinery. The bank highlights resilient external demand, strong shipments to the US and China, and an AI‑driven electronics cycle. USD/MYR has fallen for four sessions, with the Malaysian Ringgit slightly outperforming other Asian currencies versus the Dollar.
Strong external demand underpins Ringgit
“July exports rose 38.0% yoy (Bloomberg consensus: 35.0%) vs 45.5% in June, marking the fourth consecutive month of double-digit growth. The report suggests external demand remains resilient despite supply-chain disruption risks from renewed Middle East tensions. Growth was broad-based, led by electronics and machinery shipments, with AI-related infrastructure demand from hyperscalers remaining a key driver.”
“Imports rose more than expected by 36.4% yoy (Bloomberg consensus: 31.8%) vs 43.1% in June. This was driven by robust capital goods imports (+24.0%), suggesting healthy investment momentum. The trade surplus widened more than expected to MYR22.5bn (Bloomberg consensus: MYR22.9bn) vs MYR15.8bn previously.”
“In FX, USD/MYR fell 0.3% to 4.05 yesterday. The pair has declined for the fourth consecutive session, and it is approaching its lowest level since early June due to a weaker USD. Year-to-date, MYR is up 0.4% vs the USD, outperforming the average for Asian ex-Japan currencies of -1.5%.”
“Meanwhile, the AI-driven electronics cycle should continue to support semiconductor shipments as hyperscalers fulfil their capex commitments. Exports to the US surged 79.8% in July, while shipments to China rose 30.2%, highlighting continued support from key trading partners.”
“Looking ahead, export growth could face headwinds from high base effects, geopolitical uncertainties, and weather-related disruptions from El Niño. However, downside risks may be partly offset by resilient external demand. While Malaysia faces a 10% US tariff following the Section 301 forced labour investigation, around two-thirds of its exports to the US remain exempt.”
