Malaysian Ringgit: Growth supports range against US Dollar – Commerzbank
Commerzbank’s Dr. Henry Hao and Moses Lim report that Malaysia’s stronger-than-expected Q2 Gross Domestic Product (GDP) growth and subdued inflation support an unchanged policy rate of 2.75%. USD/MYR has remained within a 4.05–4.10 range, recently edging higher alongside crude oil prices. The analysts see resilient domestic demand and AI-related exports supporting growth, while supply-chain disruptions and higher commodity prices remain key downside risks.
Ringgit supported but risks rising
"The advance estimate for Q2 GDP surprised on the upside, rising 5.8% yoy (Bloomberg consensus: 5.2%) vs 5.4% in Q1."
"The economy grew 5.6% in H1, exceeding the government’s full-year forecast of 4-5%. While growth is expected to remain resilient due to firm domestic demand and strong AI-related exports, downside risks persist from continued supply chain disruptions and higher commodity prices stemming from the Middle East conflict."
"On monetary policy, Bank Negara Malaysia (BNM) is expected to leave the policy rate steady at 2.75% for the rest of the year."
"Given the tame inflationary backdrop and resilient growth momentum, there is little need for BNM to tweak monetary policy. A neutral stance also preserves policy space for BNM to react to two-sided risks to growth or inflation."
"In FX, USD/MYR rose 0.6% to 4.10 last Friday and over the week, tracking higher crude prices. The pair has remained within the 4.05–4.10 range since late June, supported by firm exports and sustained portfolio inflows."
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Overnight U.S. Stocks | All Three Major Indexes Fall, 10-Year Treasury Yield Hits Nearly 20-Year High, Oil Prices Volatile, Gold Drops Nearly 4%
At market close, the Dow Jones Industrial Average fell 347.11 points, or 0.67%, to 51,481.51 points; the S&P 500 Index dropped 59.72 points, or 0.77%, to 7,683.69 points; and the Nasdaq Composite Index declined 248.34 points, or 0.92%, to 26,820.38 points.
Trump Targets Key Midterm State Iowa: Announces $15 Billion Steel Plant Project to Create 8,000 Jobs
Trump stated that once completed, the factory will have an annual steel production capacity of 10 million tons, making it "the largest steel mill ever in the United States." White House officials noted that steel production could begin as early as 2030, with an estimated 8,000 jobs created. However, the economic benefits of the factory will not be realized before the November election this year. Iowa, as a key agricultural state, is currently facing dual pressures from high diesel prices and tariff disputes, making Trump’s political intentions evident with this move.
Pound Sterling edges higher as the BoE's deputy governors lean toward a hike
Euro slips back to its summer low as ECB President Lagarde urges measured hikes
Crypto prices
More
