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Zafrul Says Pace Of Recovery Gave BNM Room For Pre-Emptive Rate Hike

MYR

Spot USD/MYR changes hands at MYR4.3960, up 15 pips on the day, still within yesterday's range. Topside focus falls on MYR4.4085, which capped gains on May 19. Above there opens Mar 23, 2020 high of MYR4.4490. On the flip side, bears look for losses past May 12 low of MYR4.3730, before setting their sights on May 5 low of MYR4.3337.

  • Malaysia's consumer prices rose 2.3% Y/Y in April, matching consensus forecast. But food inflation reached a four-year high of +4.1% Y/Y, led by firmer dairy prices.
  • The Agriculture Ministry followed up noting that it held a meeting on measures to address food security issues. The Ministry will present its suggestions at the May 30 Cabinet meeting.
  • Elsewhere, FinMin Zafrul told Bloomberg that strong GDP growth momentum allowed Bank Negara Malaysia to pre-emptively raise interest rates and leaves more room to tighten monetary policy if needed. He judged that the current level of the key interest rate is "still accommodative."
  • Zafrul has found himself at the centre of political controversy as UMNO SecGen Ahmad confirmed that Zafrul, officially listed as an independent Senator, was already an UMNO member before becoming a Cabinet minister in 2020. Speculation is rife that Zafrul may run on a Barisan Nasional ticket in the next general election.
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Spot USD/MYR changes hands at MYR4.3960, up 15 pips on the day, still within yesterday's range. Topside focus falls on MYR4.4085, which capped gains on May 19. Above there opens Mar 23, 2020 high of MYR4.4490. On the flip side, bears look for losses past May 12 low of MYR4.3730, before setting their sights on May 5 low of MYR4.3337.

  • Malaysia's consumer prices rose 2.3% Y/Y in April, matching consensus forecast. But food inflation reached a four-year high of +4.1% Y/Y, led by firmer dairy prices.
  • The Agriculture Ministry followed up noting that it held a meeting on measures to address food security issues. The Ministry will present its suggestions at the May 30 Cabinet meeting.
  • Elsewhere, FinMin Zafrul told Bloomberg that strong GDP growth momentum allowed Bank Negara Malaysia to pre-emptively raise interest rates and leaves more room to tighten monetary policy if needed. He judged that the current level of the key interest rate is "still accommodative."
  • Zafrul has found himself at the centre of political controversy as UMNO SecGen Ahmad confirmed that Zafrul, officially listed as an independent Senator, was already an UMNO member before becoming a Cabinet minister in 2020. Speculation is rife that Zafrul may run on a Barisan Nasional ticket in the next general election.