Malaysian Ringgit: Trade surplus underpins Ringgit resilience – OCBC

OCBC’s Christopher Wong describes Malaysian Ringgit trading sideways but relatively resilient despite regional FX volatility, supported by strong September exports, a wider trade surplus and benign inflation. The bank retains a constructive bias on MYR, seeing little urgency for BNM policy changes and expecting USD/MYR to remain in a tight near-term range driven mainly by broader USD moves.

MYR supported by solid fundamentals

"MYR traded sideways last week, holding relatively steady despite renewed volatility in regional FX. Domestic data remained supportive, with September exports surging 54.5% YoY and the trade surplus widening to MYR33.7bn."

"Headline inflation also eased to 1.8% YoY, while core inflation remained stable at 1.7%. The combination of resilient external demand and manageable inflation continues to underpin Malaysia’s relatively favourable macro backdrop."

"Focus will also turn to BNM’s 5 November meeting. For now, there may be little urgency for a policy adjustment, with the relatively firm domestic backdrop allowing BNM to remain patient."

"We retain a constructive bias on MYR, although near-term direction may remain largely driven by broader USD movements and risk sentiment. The strong trade surplus is encouraging, but the extent to which export earnings translate into actual MYR conversion remains an important consideration."

"Daily momentum is flat while RSI rose. 2-way trades likely to persist. We see range of 4.08 – 4.09 within wider perimeters of 4.0760 – 4.0950."

(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor. Know more.)