The AED to MYR exchange rate has a range-bound outlook. The interest rate differential remains a crucial factor, with Malaysia's forecast for interest rate stability potentially favoring the MYR. The UAE's introduction of the Digital Dirham may introduce some uncertainty but is aimed at enhancing the AED's stability. Economic growth in both countries is expected to support their respective currencies, with the UAE projected to grow by nearly 5% in 2025 and Malaysia also showcasing strong fundamentals.
Current trading indicates the AED at 1.1042, around 2.2% lower than its three-month average. The pair has traded within a stable range of about 4.5%.
Upside risks for the AED include potential improvements in oil prices, which could bolster the MYR, while downside risks revolve around any unforeseen setbacks in the UAE’s digital currency rollout or general economic conditions that could affect investor confidence in either currency.