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MNI BNM Preview - Nov 2023: Unlikely To Join The South East Asia Tightening Trend

EXECUTIVE SUMMARY:

  • We don't expect BNM to join other central banks in SEA (Indonesia, Philippines etc) and resume its tightening cycle. Malaysian inflation pressures are much lower compared to elsewhere in the region.
  • MYR FX weakness is a source of domestic concern, but a 25bps hike won't do much to close the yield gap with the US.
  • Economic growth is comfortably off 2022 highs and partial indicators continue to suggest the manufacturing/export side remained under pressure through the tail end of Q3/early Q4. All in all, the growth backdrop points to caution around tightening policy further.
  • See our full preview here:
  • BNM Preview - November 2023.pdf


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