Malaysia Tightens Restrictions, Full Lockdown Deemed Too Costly

Spot USD/MYR has added 17 pips in early trade and last sits at MYR4.1423, trapped within the confines of Friday's range as participants digest the latest tweaks to Malaysia's Covid-19 restrictions.

• With further record-breaking daily Covid-19 case counts, Malaysia's gov't decided to tighten MCO (Movement Control Order) 3.0, albeit PM Muhyiddin clarified to Bernama/RTM that it will not be a total lockdown resembling MCO 1.0 imposed in March 2020. Muhyiddin explained that a full lockdown would entail an unbearable economic cost and "the country would not be able to recover later." FinMin Zafrul estimated that new curbs will shave up to 1% off national GDP throughout the implementation period.
• During the aforementioned Bernama/RTM interview, PM Muhyiddin said that Budget 2022 will focus on helping people weather the impact of the Covid-19 crisis.
• Sabah implemented even tighter restrictions within its boundaries, which include a one-hour shopping time limit, starting Tuesday.
• Malaysia's monthly trade data, due Friday, headline the local docket this week.
• Bulls need a clearance of May 20 high of MYR4.1475 before taking aim at MYR4.1590, which represents Mar 31 cycle high. Conversely, a retreat under the 50-DMA/May 18 low at MYR4.1243/23 would shift focus to the 200-DMA at MYR4.1106.