MYR/INR Outlook: Slightly positive, but likely to move sideways as the rate is above its recent average and lacks a clear driver.
Key drivers:
• Rate gap: The Malaysian central bank's stable interest rate policy supports the MYR, while the RBI’s interventions indicate ongoing challenges for the INR.
• Risk/commodities: Oil prices are currently high, benefiting the MYR due to Malaysia's status as a key exporter, while affecting the INR negatively due to higher import costs.
• One macro factor: India's widening current account deficit due to increased gold imports and decreased US-bound exports is pressuring the INR.
Range: The MYR/INR rate is expected to hold within its recent trading range.
What could change it:
• Upside risk: A significant improvement in US trade conditions could strengthen the INR.
• Downside risk: Continued foreign portfolio investment outflows could further weaken the INR.