The Malaysian Ringgit (MYR) has exhibited notable strength against the Indian Rupee (INR), recently trading near 21.63, approximately 2.5% above its 90-day average of 21.09. This marks a significant position as it corresponds with the MYR reaching its highest levels in 13 months, following a wave of positive economic indicators and strategic government interventions. Analysts attribute the MYR's appreciation to a stable interest rate policy maintained by Bank Negara Malaysia and optimistic GDP growth figures, forecasting continued strength as Malaysia's economy grows resiliently at 5.2% in Q3 2025.
Additional positive momentum for the MYR comes from recent trade agreements secured during the ASEAN Summit, which enhance export opportunities by offering tariff exemptions on a substantial range of products. Given these factors, forecasters are increasingly confident in the potential for the MYR to maintain its upward trajectory in the near term.
Conversely, the Indian Rupee faces significant challenges, recently hitting a record low against the US dollar. The INR's weakness can be linked to increased H-1B visa costs, diminished foreign investment, and aggressive dollar demand from importers. The Reserve Bank of India's recent interventions, such as increasing its dollar forward positions, highlight ongoing efforts to stabilize the currency, yet concerns persist about slow manufacturing export growth and a narrowing policy rate differential with the US.
The current dynamic reinforces a challenging outlook for the INR, further compounded by economic pressures such as rising US tariffs. Market observations reveal that the INR's struggles could continue in light of these persistent issues, painting a picture of an uphill battle against a strengthening MYR.
Finally, fluctuations in oil prices, which historically impact the Malaysian economy due to its status as a net exporter, currently show oil trading at $62.38, below its 3-month average. Although this decline may exert some pressure on the MYR, the broader economic fundamentals and recent trade agreements seem to provide a robust buffer against potential shocks. As a result, the outlook implies that the MYR could potentially maintain its favorable position against the INR in the near future, contingent on evolving economic conditions.
