Recent forecasts for the AED to MYR exchange rate are influenced by a combination of strategic developments in both the UAE and Malaysia, alongside broader economic trends.
Analysts have noted that the AED has been under pressure, trading near 90-day lows at around 1.1371, which is just 0.9% below its three-month average of 1.1475. This depreciation can be partly attributed to the significant currency swap agreement between the UAE and Turkey, aimed at enhancing liquidity and reducing reliance on the dollar. The agreement, valued at 18 billion AED, was signed on October 2, 2025, and reflects the UAE's ongoing efforts to protect its currency's strength amid global uncertainties. Additionally, Dubai's strategy to attract British property buyers by leveraging a weaker dirham suggests a targeted focus on boosting economic activity, particularly in the real estate sector.
On the other hand, the Malaysian Ringgit (MYR) is experiencing a strong performance supported by a favorable economic landscape. The recent rate cuts by the U.S. Federal Reserve have weakened the U.S. dollar, indirectly benefiting the MYR. Economists indicate that Malaysia's robust economic fundamentals, such as steady GDP growth and increased foreign direct investment, have strengthened investor confidence in the currency. Furthermore, Malaysia recorded a trade surplus of MYR 16.1 billion in August 2025, bolstered by rising exports and diversification efforts.
The MYR's outlook is further supported by Bank Negara Malaysia's cautious monetary policy stance, maintaining the Overnight Policy Rate at 3.00%, signaling stability amidst external pressures. This combination of supportive domestic factors and external influences positions the MYR for potential strength against the AED.
The recent volatility in oil prices may also play a role in shaping the MYR's performance, given Malaysia's status as an oil producer. Currently, oil prices are at $63.63, which is 3.4% below the three-month average of $65.86, having traded in a volatile 15% range. As the market looks to stabilize, fluctuations in oil prices could have ripple effects on the MYR's exchange rate.
Overall, the combination of these factors suggests that while the AED faces challenges, particularly from strategic agreements and a focus on leveraging its weaker status, the MYR appears to be on a firmer footing, benefiting from strong economic fundamentals and favorable external conditions.
