The widening yield gap with the US and weakening domestic growth drivers have likely dragged down the Ringgit. However, the tourism recovery has been steady, with authorities targeting 16.1 million international tourist arrivals in 2023, which will support the MYR. At the same time, a meaningful turnaround in China’s economic activity, Malaysia’s largest trading partner, will also be a strong driver for the Ringgit. 

We expect the MYR to recover modestly in Q4 and end the year at 4.55.