Malaysia: Improvement in macro stability parameters - ANZ
|In view of analysts at ANZ, there has been an improvement in Malaysia's macro stability parameters, encompassing a range of inter-related parameters that include the savings rate, current account balance, household leverage and the fiscal position.
Key Quotes
“The improvement has come about, despite a period of growing external headwinds, because Malaysian policymakers have resisted reflationary policies, apart from a single 25bp reduction in the Overnight Policy Rate (OPR) which was made in May this year.”
“The improvement in stability parameters is largely confined to Q1 2019 and may well prove to be tentative. Even so, it is a positive development to the extent that foreign investor interest in Malaysian assets has waned over the last year or so.”
“On a FX-hedged basis, we see scope for MYR bonds to return 2.9% in the next six months, outperforming many regional peers. We also illustrate that MYR bonds offer higher Sharpe ratios when hedged.”
“While the latest economic data do not yet justify a deeper rate-cutting cycle in Malaysia, Bank Negara Malaysia (BNM) has kept the door open to further easing in the event of increased external headwinds.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.