The Canadian dollar (CAD) has seen a recent decline, particularly influenced by softening oil prices and significant interest rate cuts by the Bank of Canada. Currently, the CAD to Malaysian ringgit (MYR) exchange rate is near 90-day lows at approximately 2.9316, which is about 2.7% below its 3-month average of 3.0115. Analysts note that CAD movements are closely tied to oil prices, which have recently traded at $63.37 per barrel, approximately 3% below their 3-month average and exhibiting a volatile range of 15%.
The Bank of Canada's recent decisions to cut interest rates twice, lowering the key policy rate to 2.25%, raise concerns over the country's economic outlook. This dovish stance is likely to place additional downward pressure on the CAD, especially if oil prices remain subdued. Experts point out that without a significant increase in global oil demand, the CAD may continue to face challenges in gaining strength.
Conversely, the Malaysian Ringgit has appreciated sharply, reaching a 13-month high, bolstered by positive economic indicators such as stable interest rates and robust GDP growth of 5.2% in Q3 2025. Trade agreements forged during the recent ASEAN Summit have further enhanced Malaysia's export prospects and positively influenced the MYR.
Given the recent economic developments in both countries, the CAD may remain on the defensive against the MYR in the short term. Should oil prices maintain their downward trajectory and the Bank of Canada continue its cautious monetary approach, the CAD's prospects against the MYR could further weaken. Therefore, businesses and individuals involved in international transactions should monitor these developments closely to navigate potential cost implications effectively.
