Forex Flash: Malaysian Central Bank to remain in wait-and-see mode - TD Securities

FXstreet.com (Barcelona) - Since the global and domestic economic conditions have barely been altered since the last Bank Negara Malaysia meeting, it justifies TD Securities Research Team view, which sees the BNM likely to keep the level of the Overnight Policy Rate unchanged at 3.00% on Thursday, in line with unanimous market consensus.

"Recent inflation figures were in line with the BNM forecasts, and should not be a concern. Central to the BNM’s policy are weak global growth and domestic demand which has so far remained relatively resilient to the global shocks. The fact that Bank Negara Malaysia rejected the temptation to cut rates over the past meetings suggests that the OPR at 3.00% is already sufficiently accommodative" notes TD Securities.

The risk on Thursday, according to TDS, "is that the benign inflation and the slow pace of growth in China and globally may induce the BNM to introduce further dovish wording, but likely not to an extent which would change our outlook." The Research Team at TDS concludes that the MPC "is likely to remain in wait-and-see mode over the foreseeable future, and the assessment of these two drivers will remain key to the BNM’s stance."

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