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MNI BNM Preview - July 2024: Firmly On Hold

No change is expected from BNM at tomorrow's policy meeting

Asia Bank - PreviewHomepageCentral Bank of Malaysia - PreviewEM Central Bank ReportsEM Central Bank PreviewEmerging Market News

EXECUTIVE SUMMARY

  • The BNM is seen as firmly on hold at tomorrow’s policy meeting. There seems little incentive for BNM to shifts it policy bias in either direction at tomorrow’s meeting. The central bank is likely to maintain the view that current policy settings remain supportive of the economic backdrop
  • Inflation pressures have firmed, but from a low base and recent diesel subsidy shifts are unlikely to impact significantly.
  • For USD/MYR, we have stabilized around the 4.7000 level in recent months. There is no pressing need for BNM to sound more hawkish to defend the ringgit. Its preferred stance is to use administrative measures to encourage offshore inflows to support the ringgit. Equally, a fresh dovish stance risks fresh FX weakness.
  • Full preview here:

    • BNM Preview - July 2024.pdf


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EXECUTIVE SUMMARY

  • The BNM is seen as firmly on hold at tomorrow’s policy meeting. There seems little incentive for BNM to shifts it policy bias in either direction at tomorrow’s meeting. The central bank is likely to maintain the view that current policy settings remain supportive of the economic backdrop
  • Inflation pressures have firmed, but from a low base and recent diesel subsidy shifts are unlikely to impact significantly.
  • For USD/MYR, we have stabilized around the 4.7000 level in recent months. There is no pressing need for BNM to sound more hawkish to defend the ringgit. Its preferred stance is to use administrative measures to encourage offshore inflows to support the ringgit. Equally, a fresh dovish stance risks fresh FX weakness.
  • Full preview here:

    • BNM Preview - July 2024.pdf