USD/MYR to reach 4.62 by 1Q2024 and 4.47 by year-end – MUFG
|The reason that MYR was the least performing EM Asia currency in 2023 was due to its high correlation with CNY. MYR depreciated about 5.6% against the Dollar. Economists at MUFG Bank analyze USD/MYR outlook.
Ringgit to benefit from high correlation with CNY
MYR will be in a relatively better position among low yielding currencies, due to its high correlation with CNY. An improving sentiment regarding CNY would lift MYR.
Recent nascent performance in South Korea and Taiwan’s semiconductor exports may shed some light for Malaysia’s semiconductor exports in 2024. Additionally, with Malaysian government’s ambitious plan to bolster the country’s competitive edge in the global semiconductor industry, we expect FDI inflows to improve in 2024 and provide support for MYR.
We forecast USD/MYR to reach 4.62 by 1Q2024 and 4.47 by end-2024.
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