USD/MYR seen around 4.15 early in 2021 – UOB

The Malaysian ringgit is expected to appreciate to the 4.15 area vs. the greenback at the beginning of the next year, according to FX Strategists at UOB Group.

Key Quotes

“USD/MYR grinded lower across July from 4.29 to 4.25, reflecting a broad USD decline and also encouraging signs that activity is picking up locally.”

“Bank Negara Malaysia delivered another 25 bps rate cut in July, bringing the benchmark interest rate to a record low of 1.75% to provide additional policy stimulus to accelerate the pace of economic recovery.”

“With the worst of Malaysia’s economic woes probably over in the 2Q, the steady pace of recovery of its economy and the MYR is likely to solidify in the coming quarters. We update our USD/MYR forecasts to 4.20 in 3Q20, 4.18 in 4Q20, and 4.15 in 1Q21 and 2Q21.”