BNM Maintains OPR At 1.75%, Malaysia Investigates Sarawak Uptick In Covid Cases

Spot USD/MYR trades at MYR4.1473, a dozen pips lower on the day, after Malaysia's central bank left its benchmark policy rate unchanged. Bears need a fall through Sep 6/Jun 25 lows of MYR4.1425/23 before setting their sights on Jun 17 low of MYR4.1295. Bulls look for a rebound above the 100-DMA, which intersects at MYR4.1632.

• Bank Negara Malaysia left the Overnight Policy Rate unchanged at 1.75%, in line with expectations. The central bank tipped hat to the recent easing of restrictions on activity and ongoing policy support but noted that "risks to the growth outlook (...) remain tilted to the downside".
• J.P. Morgan said they "continue to expect a 25bp hike in 3Q22 with subsequent policy tightening largely dependent on Covid-19-related developments," while Goldman Sachs commented that they see the OPR unchanged through the year-end.
• Participants look ahead to Malaysia's industrial output data, due today. Next week's docket is fairly empty, with Malaysia set to observe a public holiday on Thursday.
• Meanwhile, Malaysia is looking into a surge in Covid-19 infections and hospitalisations in the highly vaccinated state of Sarawak. Health Min Khairy said that the cause is not yet known but speculated that the waning effectiveness of vaccines might be one possibility.