Forecasts for MYR to CNY
According to recent forecasts by currency analysts, the Malaysian Ringgit (MYR) is expected to perform relatively strong against the Chinese Yuan (CNY) in the coming years. The MYR is predicted to end 2023 in the range of 4.20 to 4.30 per US dollar, suggesting a positive outlook for the currency. This is mainly attributed to the strength of the MYR's fundamentals, supported by the recovery of the tourism sector in Malaysia. As tourism increases, it is expected to lead to a narrower deficit in Malaysia's services account, which would potentially positively impact the Ringgit. Additionally, the long-term weakness of the Malaysian currency may attract expatriates and high-valued foreigners to invest in the country's real estate market, particularly due to the cheaper Ringgit and lower cost of living compared to neighboring countries like Singapore.
On the other hand, the Chinese Yuan has been facing challenges in its recovery from the COVID-19 pandemic, as indicated by its depreciation against the US dollar. The weakening of the Yuan can be seen as a signal that the recovery momentum of the Chinese economy is slowing down or facing headwinds. This can have various implications, such as affecting the cost of imports, the competitiveness of Chinese exports, and potentially leading to capital outflows. With China's weakening economy, the central bank has already implemented interest rate cuts and is expected to provide more stimulus, particularly in industries like real estate.
Taking into account recent MYR to CNY price data, the exchange rate has been at 90-day lows near 1.5140, which is 2.1% below its 3-month average of 1.5467. This indicates a relatively stable trading range for the two currencies. Furthermore, as for the impact of oil price movements on the MYR, the recent Brent Crude OIL/USD price data shows that it is currently 8.0% below its 3-month average of 87.62. This suggests a decline in oil prices, which could have an indirect effect on the MYR due to Malaysia being one of the largest oil producers in Asia.
In summary, based on the analysis of recent forecasts and market data, the Malaysian Ringgit is expected to maintain its strength against the Chinese Yuan. The positive outlook for the MYR is primarily driven by the recovery of the tourism sector, potential real estate investments from foreigners, and the relative stability in oil prices. However, the challenges faced by the Chinese economy may put pressure on the Yuan and influence the exchange rate dynamics between the two currencies.
