The exchange rate forecast for the Malaysian Ringgit (MYR) against the Indian rupee (INR) indicates a positive outlook for the MYR, largely influenced by recent economic developments in Malaysia and external factors affecting the INR. Analysts have noted that the MYR has appreciated approximately 3.6% above its 3-month average, currently standing at 22.18, with a trading range from 20.74 to 22.25.
The strengthening of the MYR can be attributed to several key developments. The Malaysian economy has shown resilience, with GDP growth exceeding expectations in the third quarter of 2025, bolstering investor confidence. Additionally, the stability in monetary policy, with Bank Negara Malaysia maintaining interest rates at 3.00%, signals a commitment to economic growth, further enhancing support for the MYR. Improved trade relations, particularly following a reciprocal trade agreement with the United States, have also contributed to its appreciation, providing clarity and boosting Malaysia's trade competitiveness.
In contrast, factors adversely affecting the INR are prominent. The Indian Rupee has been under pressure due to the US Federal Reserve's high interest rates, attracting capital away from India and leading to downward pressure on the rupee. Furthermore, India's widening trade deficit, which has been exacerbated by increased gold imports and a slowdown in export growth, has diminished demand for the rupee. The recent imposition of significant tariffs on Indian exports by the US has further tarnished trade relations and investor confidence, resulting in continued depreciation of the INR.
The fluctuating oil prices also play a significant role in influencing both currencies. Currently, oil trades at 60.89, which is 3.9% below its 3-month average of 63.35. Given Malaysia's status as a net oil exporter, lower oil prices could potentially impact the strength of the MYR, although the current trends seem to favor the currency, alongside sound fundamentals.
Overall, while the MYR is demonstrating strength driven by domestic economic performance and favorable trade, the INR faces challenges around trade deficits and external pressures. These dynamics suggest that businesses and individuals making transactions between MYR and INR may find potential advantages in the near term for dealings involving the MYR.
