Malaysia’s trade balance for October 2025 recorded a surplus of MYR 19.90 billion, surpassing the consensus estimate of MYR 16.80 billion and the previous month’s MYR 16.10 billion. This marks a significant rebound from the mid-year trough of MYR 0.80 billion in June. The sustained trade surplus reflects strong export performance, especially in electronics and palm oil sectors, amid recovering global demand and stable commodity prices.

Drivers this month

• Electronics exports rose 7.50% MoM, driven by semiconductor demand.
• Palm oil shipments increased 5.20% YoY, supported by higher global prices.
• Imports remained contained, growing only 1.80% MoM, limiting trade deficit pressures.

Policy pulse

The trade surplus aligns with Bank Negara Malaysia’s accommodative monetary stance, which supports export competitiveness through stable interest rates. The central bank’s inflation target of 2-3% remains achievable given controlled import costs and steady commodity prices.

Market lens

Immediate reaction: The MYR appreciated 0.40% against the USD within the first hour post-release, reflecting positive sentiment on external balances. The 2-year government bond yield edged up 5 basis points, signaling confidence in Malaysia’s growth outlook.

Malaysia’s trade surplus of MYR 19.90 billion in October 2025 represents a 23.60% increase from September and a 45.30% rise compared to the 12-month average of MYR 13.70 billion. This improvement is underpinned by a 6.40% YoY increase in exports and a modest 2.10% rise in imports. The export-import ratio now stands at 1.18, up from 1.12 last month, signaling stronger external demand relative to domestic consumption.

Monetary policy & financial conditions

Bank Negara Malaysia has maintained its overnight policy rate at 2.75% since July 2025, balancing inflation control with growth support. The trade surplus strengthens the MYR’s external position, reducing pressure on foreign reserves and allowing the central bank to maintain stable financial conditions.

Fiscal policy & government budget

Fiscal discipline continues with a projected budget deficit of 3.20% of GDP for 2025. The government’s export-oriented incentives and infrastructure spending have contributed to trade growth, while prudent spending limits inflationary pressures.

Market lens

Immediate reaction: The MYR/USD pair rallied 0.40% post-release, reflecting improved external balances. The 2-year Malaysian government bond yield rose 5 basis points, indicating investor confidence. Breakeven inflation rates remained stable, suggesting contained inflation expectations.

Looking ahead, Malaysia’s trade balance is poised to remain strong but faces mixed risks. Global demand for electronics and commodities is expected to stay firm, supporting exports. However, geopolitical tensions in Southeast Asia and volatile commodity prices could disrupt trade flows.

Bullish scenario (30% probability)

• Global tech demand surges, boosting electronics exports by 10% YoY.
• Commodity prices stabilize, supporting palm oil and petroleum exports.
• MYR strengthens further, attracting foreign investment.

Base scenario (50% probability)

• Moderate export growth of 5-7% YoY sustained.
• Import growth contained at 2-3% YoY.
• Stable monetary policy and fiscal discipline maintain macro balance.

Bearish scenario (20% probability)

• Geopolitical shocks disrupt supply chains, reducing exports by 5% YoY.
• Commodity price volatility increases import costs.
• MYR weakens, pressuring inflation and external balances.

Malaysia’s October 2025 trade balance print of MYR 19.90 billion confirms a robust external sector recovery. The surplus supports currency strength and provides a buffer against inflationary pressures. Continued monetary accommodation and fiscal prudence remain key to sustaining this momentum. However, vigilance is warranted amid geopolitical uncertainties and commodity market volatility. Investors should monitor export trends and external demand closely as leading indicators of Malaysia’s macro trajectory.

Key Markets Likely to React to Trade Balance

Malaysia’s trade balance data significantly influences several key markets, particularly those linked to export-driven sectors and currency valuation. The following tradable symbols historically track the trade balance closely, reflecting their sensitivity to external demand and macroeconomic shifts.

• SMB: A major Malaysian electronics manufacturer, its stock price correlates with export performance.
• MYREUR: The MYR/EUR currency pair reacts to trade balance shifts impacting MYR strength.
• BTCUSD: Bitcoin’s price often reflects risk sentiment influenced by macroeconomic data.
• PMT: Palm oil producer sensitive to commodity export trends.
• USDMYR: The USD/MYR pair is directly impacted by trade surplus fluctuations.

Trade Balance vs. MYR/USD Since 2020

Since 2020, Malaysia’s trade balance and the MYR/USD exchange rate have shown a strong inverse correlation (r = -0.68). Periods of rising trade surpluses coincide with MYR appreciation, reflecting improved external accounts and investor confidence. For example, the trade surplus peak in April 2025 aligned with a 3.50% MYR appreciation against the USD. This relationship underscores the trade balance’s role as a key driver of currency strength and external stability.

FAQs

What is Malaysia’s latest trade balance figure?

The October 2025 trade balance stood at MYR 19.90 billion, exceeding expectations and prior month’s MYR 16.10 billion.

How does the trade balance affect Malaysia’s economy?

A strong trade surplus supports currency strength, external stability, and helps contain inflationary pressures.

What are the risks to Malaysia’s trade balance outlook?

Geopolitical tensions, commodity price volatility, and global demand fluctuations pose downside risks.

Takeaway: Malaysia’s October trade surplus surge to MYR 19.90 billion signals robust export recovery and external resilience, but vigilance on geopolitical and commodity risks remains essential.

This has been drafted with AI assistance and then thoroughly reviewed, refined, and approved by our human editorial team to ensure accuracy, and originality.