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HONG KONG - Malaysian manufacturers are urging policymakers to prioritise exchange-rate stability, warning that persistent currency volatility is becoming a growing impediment to business planning, pricing decisions and long-term competitiveness.
Federation of Malaysian Manufacturers (FMM) President Jacob Lee Chor Kok said fluctuations in the ringgit have forced companies to devote increasing resources to monitoring foreign-exchange movements and renegotiating contracts, creating additional costs and uncertainty across the sector.
“Manufacturers are not looking to profit from forex movements,” he told Malaysian media at the sidelines of the GBA-Asean Summit 2026. “What businesses need is stability that allows them to plan, price and compete effectively over the long term.”
The call comes as the US dollar remains relatively strong against the ringgit, a dynamic that has produced mixed outcomes for Malaysian manufacturers. While a weaker ringgit can boost the attractiveness of Malaysian exports in global markets, it also raises costs for companies that rely heavily on imported materials and components priced in US dollars.
According to Lee, foreign-exchange volatility has become a recurring feature of the operating environment, with the ringgit recently trading around 4.06 to 4.09 against the dollar after weakening to levels near 4.30 earlier.
“The current level is still manageable,” he said. “But the impact of a stronger US dollar is not the same for everyone.”
Export-oriented manufacturers with relatively low import content tend to benefit from a weaker ringgit as their products become more competitively priced overseas. However, companies that depend heavily on imported inputs face higher production costs, offsetting much of the currency advantage.
“It is not a one-size-fits-all situation,” Lee said. “The outcome depends very much on a company’s business structure and its exposure to imported materials.”
The burden is particularly acute for small and medium-sized enterprises, many of which lack access to sophisticated hedging instruments commonly used by larger corporations to manage currency risks.
He said large companies have financial tools available to manage forex volatility, but that is often not the case for SMEs.
Among the sectors most exposed to a strong US dollar are advanced manufacturing industries such as semiconductors, machinery and automotive production, where imported components account for a substantial portion of costs. Food and beverage manufacturers are also vulnerable due to their reliance on imported raw materials.
“These industries have high import content, so a weaker ringgit translates directly into higher costs and pressure on margins,” Leesaid.
Beyond cost considerations, FMM warned that exchange-rate volatility can also complicate negotiations with overseas buyers. While exporters may appear to gain from a weaker domestic currency, customers often seek lower prices, limiting the benefits that manufacturers can capture.
“Customers are not unaware of currency movements,” he said. “When the ringgit weakens, they will often push for price concessions, so the gains are not always as straightforward as they appear.”
For manufacturers, he added, the priority is not a stronger or weaker currency, but a more predictable one.
“Stability is ultimately more important than the direction of the exchange rate,” Lee said, adding that businesses can adapt to different levels, but volatility makes planning and decision-making much more difficult.
The GBA-Asean Summit 2026 is a high-level economic forum focused on strengthening trade, capital flows and cross-border innovation between China's Guangdong-Hong Kong-MacauGreater Bay Area and Asean nations.