Forecasts for MYR to CNY
The exchange rate forecast for the Malaysian Ringgit (MYR) against the Chinese Yuan (CNY) reflects a complex interplay of geopolitical factors, recent trade tensions, and economic indicators. Following U.S. President Donald Trump’s imposition of a 24% tariff on imports from Malaysia, analysts suggest that the MYR may face additional downward pressure amid a deteriorating outlook for emerging Asian currencies. The nation's refusal to retaliate indicates a strategic approach, but the combination of tariffs and heightened global trade war fears has dampened risk appetite within the region.
Currently, the MYR is trading near 90-day highs against the CNY at approximately 1.7084, which is 3.9% above its three-month average of 1.6442. Analysts have noted that this rate has remained relatively stable within a 6.2% range since lows of around 1.6084, which may reflect short-term resilience despite broader regional challenges. However, the economic situation in Malaysia, particularly with its dependence on oil prices, is pivotal. Recent oil prices have dipped to 90-day lows near USD 61.29, significantly 13.2% under the three-month average of USD 70.61. As Malaysia is a major oil exporter, such declines could weigh heavily on the MYR moving forward.
On the other hand, the CNY is experiencing its own set of challenges, largely due to the increasing pressure from ongoing trade conflicts. A swift response from Beijing, which included a 34% tariff on all U.S. imports, reflects a deteriorating relationship with the U.S., leading to speculation about further depreciation of the yuan. Economists are concerned that a weakened yuan may indicate struggles in China's economic recovery post-Covid-19, especially with indicators suggesting slow growth and increasing joblessness.
The People's Bank of China (PBOC) has begun to allow the yuan to float downward in reaction to these pressures, with analysts suggesting that a breach below the 7 per dollar mark indicates a significant depreciation. This currency fluctuation could have implications for both imports and exports, further impacting the Chinese economy.
In summary, while the MYR has shown some robustness recently against the CNY, the looming trade tariffs and the fragile nature of the global economic landscape present concerns for both currencies. Continued monitoring of oil prices and trade developments will be crucial for stakeholders engaged in international transactions involving these currencies.
