USD/MYR Holds Tight Range, Eyes Thursday's BNM Decision

Spot USD/MYR last sits at MYR4.1520, 45 pips better off as we type. It has remained confined to a fairly tight range since the back end of last week. The rate continues to look for any immediate catalysts, while already awaiting some notable events ahead.

• On Thursday, BNM will deliver its monetary policy decision. Out of the 16 economists surveyed by BBG, 11 expect the central bank to leave its main policy rate unchanged at 1.75%. The 5 dissenters look for a 25bp cut. BNM has already delivered 125bp worth of rate cuts this year.
• It may be a bit early to flag this, but FTSE Russell will release its Fixed Income Country Classification Annual Announcement on Sep 24, with Malaysia on the watch list for possible reclassification from Market Accessibility Level 2 to 1. Such reclassification would entail the exclusion of Malaysian debt from the FTSE World Government Bond Index.
• Worth recapping Friday's comments from a Malaysian minister, who said that the country will not extradite Uighur refugees to China and will allow them safe passage to a third country, in what could weigh on Sino-Malaysian relations.
• From a technical perspective, bears remain in control with last week's "death cross" formation only strengthening their case. A break under Sep 3 low of MYR4.1343 would give them a signal to target the lower 3.0% Bollinger band at MYR4.1182. Conversely, a bounce above MYR4.1643, a ceiling of a descending channel drawn off Aug 6 low, would open up Aug 28 high of MYR4.1780.
• The main Malaysian data releases this week are industrial output and m'fing sales value, both due Friday.