The SGD to MYR exchange rate shows a bearish bias, reflecting recent economic developments in both countries.
Key drivers include the interest rate differential, where the Monetary Authority of Singapore has maintained policies that support a weaker SGD. In contrast, Malaysia benefits from robust GDP growth and fiscal reforms that enhance the MYR's attractiveness. Additionally, the anticipated narrowing of interest rate differentials due to potential U.S. rate cuts may further support the MYR.
Currently, the SGD to MYR rate is trading below its three-month average, with an expected range remaining within a similar corridor of the past few months.
Upside risk for the SGD could stem from a significant rebound in global demand, boosting non-oil exports. Conversely, a sharp decline in oil prices may negatively impact the MYR, steering it lower against the SGD, particularly given the volatile nature of recent oil price movements.