MYR/VND Outlook:
The MYR is likely to increase as it currently trades above its recent average and is supported by strong economic growth in Malaysia. The rate is also near the higher end of its recent range, reinforcing this positive outlook.
Key drivers:
- Rate gap: Bank Negara Malaysia maintains a stable interest rate of 2.75%, helping the MYR gain against the VND as Vietnam faces tight liquidity and rising interbank rates.
- Risk/commodities: The recent rise in oil prices has positively impacted the MYR, aligning with Malaysia’s position as a significant oil exporter.
- One macro factor: Strong growth in Malaysia's construction sector, expanding by over 10% year-on-year, boosts demand for the MYR.
Range:
The MYR/VND is likely to test the upper limits of its recent 3-month trading range while maintaining its recent strength.
What could change it:
- Upside risk: Further economic improvements in Malaysia, particularly in key sectors, could strengthen the MYR.
- Downside risk: Increased pressure on the VND due to ongoing liquidity issues could negatively affect its valuation.
