Malaysian Ringgit: Resilience supported by trade surplus – OCBC

September exports surged 54.5% YoY. OCBC’s Christopher Wong says strong exports, a wider trade surplus and benign inflation have supported the Malaysian Ringgit, which has traded sideways while remaining relatively resilient to regional FX volatility. With little urgency seen for BNM to adjust policy, the bank remains constructive on MYR. It expects USD/MYR to trade within a narrow near-term range, with broader USD movements providing the main direction.

54.5% export growth underpins MYR fundamentals

"MYR traded sideways last week, holding relatively steady despite renewed volatility in regional FX. Domestic data remained supportive, with September exports surging 54.5% YoY and the trade surplus widening to MYR33.7bn."

"Headline inflation also eased to 1.8% YoY, while core inflation remained stable at 1.7%. The combination of resilient external demand and manageable inflation continues to underpin Malaysia’s relatively favourable macro backdrop."

"Focus will also turn to BNM’s 5 November meeting. For now, there may be little urgency for a policy adjustment, with the relatively firm domestic backdrop allowing BNM to remain patient."

"We retain a constructive bias on MYR, although near-term direction may remain largely driven by broader USD movements and risk sentiment. The strong trade surplus is encouraging, but the extent to which export earnings translate into actual MYR conversion remains an important consideration."

"Daily momentum is flat while RSI rose. 2-way trades likely to persist. We see range of 4.08 – 4.09 within wider perimeters of 4.0760 – 4.0950."

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