Malaysian Ringgit: Trade surplus underpins Ringgit resilience – OCBC

OCBC's Christopher Wong explains that the Malaysian Ringgit has remained relatively stable, despite increased regional currency volatility. This resilience is attributed to robust September exports, a widening trade surplus, and moderate inflation. The bank maintains a positive outlook on the MYR, anticipating minimal urgency for Bank Negara Malaysia (BNM) policy adjustments.

September exports increased by 54.5% year-over-year, contributing to a trade surplus of MYR33.7 billion. Inflation has also eased, with headline inflation at 1.8% year-over-year and core inflation stable at 1.7%. The favorable macroeconomic backdrop and manageable inflation continue to support Malaysia's relatively strong position.

The focus will now shift to BNM's meeting on November 5, but for now, a policy change may not be seen as urgent due to the strong domestic fundamentals. The bank retains a constructive bias on MYR, although near-term direction may be mainly influenced by broader USD movements and risk sentiment. The trade surplus is a positive factor, but the conversion of export earnings to MYR remains a key consideration.

Momentum is currently flat, with the Relative Strength Index (RSI) showing a rise. The MYR is expected to trade within a range of 4.08 to 4.09 over the near term, with a broader range of 4.0760 to 4.0950.