The recent exchange rate dynamics between the Malaysian Ringgit (MYR) and the Thai Baht (THB) have been significantly influenced by geopolitical tensions and domestic economic conditions. Analysts note that the MYR to THB rate has approached a 90-day low at 7.5404, which is 1.9% below its three-month average of 7.6826, and has been trading within a relatively stable range of 7.5404 to 7.8265.
The imposition of a 24% tariff on Malaysian goods by the U.S. has created a downward pressure on the MYR as markets react to fears surrounding escalating trade wars and an unfavorable economic outlook for emerging Asian currencies. The MYR's recent performance reflects these tensions, alongside Malaysia's strategical engagement rather than retaliatory action against the tariffs, as stated by Prime Minister Anwar Ibrahim. Economists believe this stance aims to coordinate a broader regional response, which could help stabilize the MYR in the long run.
Conversely, the THB has also faced similar pressures, with a more substantial 36% tariff imposed by the U.S. on Thai goods. This has compounded negative sentiment, pushing regional currencies lower, including the THB which has seen a decline of about 2%. The prevailing environment of uncertainty surrounding international trade policies is anticipated to continue straining both currencies.
Additionally, fluctuations in oil prices can indirectly impact the MYR, given Malaysia's status as a significant oil exporter. Recent data indicates that oil prices are currently at 69.67 USD per barrel, which is 2.5% higher than their three-month average of 67.98 USD. Despite a volatile trading range of 31.1% from 60.14 to 78.85, the upward trend in oil prices could provide some support to the MYR, depending on future developments.
Overall, currency analysts suggest that continued geopolitical tensions and trade policy decisions will be crucial factors influencing the MYR to THB exchange rate in the near term. Businesses and individuals engaging in international transactions should remain vigilant and consider the potential risk associated with these dynamics.