Recent forecasts for the Malaysian Ringgit (MYR) to Indian Rupee (INR) exchange rate reflect a complex interplay of geopolitical tensions, trade policies, and market sentiment. Analysts highlight that the MYR has recently traded at 20.29, which is notably 2.8% above its three-month average of 19.72. This increase marks a seven-day high, with the MYR fluctuating within a relatively stable range of 5.8% from 19.19 to 20.30.
The MYR is facing downward pressure due to U.S. President Donald Trump's announcement of a 24% tariff on imports from Malaysia, adding to concerns regarding a potential trade war. Economists suggest that Malaysia's approach to this tariff, particularly its decision not to retaliate and to engage diplomatically, may provide some level of support to its currency amidst rising regional uncertainties. However, given the general deterioration in the outlook for emerging Asian currencies following these tariff announcements, there may be further downside risks for the MYR.
On the other hand, the Indian rupee has been negatively impacted by a range of factors as well, including fears of rising energy prices leading to inflation and potential interest rate hikes. The INR has experienced a steady weakening trend, influenced by surging crude oil prices, which are particularly significant for India as it is a major oil importer. Current oil prices are at $74.23, which is 10.9% higher than the three-month average of $66.94, contributing to domestic inflationary pressures. Market participants note that the broader implications of U.S. tariffs and potential escalation of trade tensions could add further volatility to Asian currencies, including the INR.
Experts conclude that the overall sentiment surrounding both the MYR and INR reflects a mix of geopolitical risk and market reactions to U.S. trade policies, with both currencies expected to face ongoing challenges as traders react to unfolding developments. Consequently, the outlook for the MYR to INR exchange rate remains uncertain, with potential for continued fluctuations as the market digests this complex information landscape.