Bias: The MYR/INR is bullish-to-range-bound, currently above the 90-day average and within the upper half of the 3-month range.
Key drivers:
- Rate gap: The Bank Negara Malaysia's recent stance on interest rates, in contrast to the Reserve Bank of India's interventions, supports the MYR against the INR.
- Risk/commodities: With oil prices above their 3-month average, the Malaysian economy benefits, supporting the MYR due to its strong commodity exports.
- Macro factor: Malaysia’s robust GDP growth projection of 5.1% enhances investor confidence in the MYR's strength.
Range: The MYR/INR pair is likely to test recent highs and may experience minor fluctuations within the upper range.
What could change it:
- Upside risk: A significant drop in global oil prices could bolster the INR if it reduces inflationary pressures in India.
- Downside risk: Ongoing capital outflows from India or worsening trade deficits may weigh down the INR further, impacting the MYR/INR exchange rate.