The exchange rate between the Malaysian Ringgit (MYR) and the Chinese Yuan (CNY) has shown resilience and favorability for MYR in recent forecasts, attributed to several key economic developments. Analysts have pointed out that the U.S. Federal Reserve's rate-cutting cycle, initiated in September 2025, has weakened the U.S. dollar, creating a supportive environment for MYR gains. Malaysia's strong economic fundamentals, evidenced by steady GDP growth and consistent foreign direct investment inflows, have further bolstered confidence in the currency.
In August 2025, a notable trade surplus of MYR 16.1 billion, resulting from increased exports and strategic market diversification, underscored Malaysia's economic strength, while Bank Negara Malaysia's decision to maintain the Overnight Policy Rate at 3.00% indicates a cautious but stable monetary policy stance amid external uncertainties. This stability has contributed to the MYR reaching 60-day highs near 1.6960 against the CNY, maintaining a stable trading range of 1.6840 to 1.7053, slightly above its three-month average.
On the other hand, the CNY is experiencing mixed influences from the global market. China's ongoing efforts to internationalize the yuan, including advancements in the digital yuan, aim to enhance its use in international trade. However, the People's Bank of China has focused on stabilizing the yuan amidst rising global uncertainties and potential fluctuations, showcasing a strong commitment to managing its exchange rate.
Moreover, concerns have emerged regarding the impact of U.S. tariffs, particularly on the yuan's valuation compared to the euro, as highlighted by U.S. Treasury Secretary Scott Bessent. This presents additional external pressures that could influence the CNY's performance against the MYR.
Oil prices, which can impact the MYR significantly, have recently traded at USD 65.07, approximately 1.7% below their three-month average, highlighting a volatile trading environment. Analysts note this could be an important factor to monitor as it intertwines with Malaysia's export-driven economy.
Overall, the current environment suggests that while the MYR stands to benefit from domestic economic resilience and favorable global conditions, the CNY could remain under pressure due to international trade dynamics and policy measures from Chinese authorities. Businesses and individuals engaging in international transactions should consider these factors in their currency strategies.
