Malaysia's Tax Proposals Unsettle Ringgit

Spot USD/MYR has moved higher, last changes hands +83 pips at MYR4.1485. Bulls look for gains past Oct 28 high of MYR4.1582, which would open up the 50-DMA/Oct 18 high at MYR4.1719/20. Bears need a fall through Oct 29 low/200-DMA at MYR4.1392/67 to bring Sep 10 low of MYR4.1300 into view.

• The ringgit may have been undermined by the latest tax proposals outlined in Budget 2022 tabled on Friday, which include a one-off 33% windfall tax on any company income above MYR100mn and a higher stamp duty rate.
• The MYR332.1bn spending plan unveiled by PM Ismail Sabri is the biggest on record. The government projected that the economy will grow 5.5%-6.5% Y/Y next year.
• Lawmakers will begin the debate on the draft budget today, the first speaker will be opposition leader Anwar. The plenary session will last for seven days, before a four-day wind-up by ministers and 13 days of committee discussions.
• Bank Negara Malaysia are set to release their monetary policy decision on Tuesday, they are widely expected to leave the OPR unchanged at 1.75%.