The exchange rate forecast for the Malaysian Ringgit (MYR) against the New Taiwan Dollar (TWD) has been influenced by several key developments in both economies over the past two months. As of October 19, 2025, the MYR has reached 90-day highs near 7.3369, reflecting a 1.9% increase above its three-month average of 7.2031. This upward movement follows a relatively stable trading range, fluctuating from 6.9454 to 7.3369, driven by a combination of macroeconomic indicators and policy decisions.
Support for the MYR has stemmed from the Federal Reserve's rate-cutting cycle initiated in September 2025, which has weakened the U.S. dollar and thus boosted the MYR. Additionally, Malaysia's robust economic fundamentals, characterized by steady GDP growth and significant foreign direct investment inflows, continue to foster investor confidence. The country also reported a trade surplus of MYR 16.1 billion in August 2025, enhanced by a diversification strategy towards emerging markets.
Simultaneously, Bank Negara Malaysia's cautious stance in maintaining the Overnight Policy Rate at 3.00% has signified a measured approach to monetary policy against external uncertainties. These factors collectively suggest a strengthening of the MYR against the TWD.
On the TWD side, recent developments indicate a strong economic outlook for Taiwan. The central bank raised its 2025 economic growth forecast significantly from 3.05% to 4.55%, bolstered by strong exports, particularly in AI-related semiconductors. The benchmark interest rate has been kept unchanged at 2%, which reflects stability. However, concerns have emerged regarding the TWD's appreciation, which has surged by over 9% against the USD, raising alarm among exporters about potential competitiveness losses.
This appreciation, noted by Bank of America's forecast, is expected to continue, primarily due to strong export performance and corporate hedging activities. However, challenges remain, as the TWD's strength has negatively impacted local insurers and raised concerns about economic sustainability amidst tariff risks.
Moreover, oil prices currently trading at 65.07 USD, 1.7% below the three-month average, could have implications for the MYR in the context of the Malaysian economy, which is sensitive to oil price fluctuations.
In conclusion, while the MYR currently enjoys a favorable position against the TWD due to supportive local economic conditions, the appreciation of the TWD involves complexities that could influence future exchange rate dynamics. Analysts remain cautious and suggest that those involved in international transactions should stay vigilant to global economic signals that may impact these currencies.
