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CYS Dealing Desk Outlook - Ringgit Strengthening

Contributed by Alvin Yam, Chief Dealer & Manager In-Charge FX Sales


Weighed down by political instability, higher global interest rates, and sluggish growth among trading partners, the outlook for Malaysia Ringgit (MYR) remains uncertain, having been on the backfoot since the year's outset. Historically, external factors have consistently influenced the ringgit, indirectly fueling its volatility. The depreciation of the MYR was set off by successive interest rate hikes by the US Federal Reserve. Furthermore, China's predicaments, as Malaysia's primary trading partner, resulting from its unpopular lockdown policies, have cast a negative shadow over the MYR.

Historically, the Malaysian economy has heavily depended on goods and services trade with China. There was an expectation that the MYR would experience significant strengthening after China's economy reopened post-pandemic, with an influx of tourism and heightened foreign investment in the country. However, China continues to grapple with significant economic challenges and sectoral contractions, resulting in a slower recovery to its pre-Covid levels than initially foreseen. As a result, a sense of lingering pessimism persists in the ringgit market.

Closer to home, Singaporean corporations are discovering increased value in utilizing the Singapore Dollar for their operations when dealing with the Malaysian Ringgit. This uptick in demand for remitting MYR back to Malaysia encompasses a range of expenses.

While the MYR has exhibited relative stability in recent months, there are indications that it is trending in a positive direction. Looking ahead, as the Malaysian economy sustains its recovery, supported by core sectors like tourism and foreign interest in real estate, the MYR could potentially face some medium-term hurdles. Nonetheless, there remains the possibility of imminent strengthening.

At the dealing desk of CYS Global Remit, we maintain our commitment to ongoing collaboration with our network of Malaysian agents. This commitment ensures that we provide the most favorable rates to cater to the consistent demand for our customers' MYR needs, particularly as the ringgit endeavors to uphold its present trajectory.

Speak to us for your MYR needs today.

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