Malaysian inflation remains weak in July, policy rate likely to stay unchanged in 2019-2020
Source: FxWire Pro - Commentary / 14 Aug 2019 10:38:00 America/New_York
Malaysian inflation continues to be benign in July. Sequentially, the headline inflation came in at 0.1 percent, compared with a flat print in the prior month. Food prices were the main contributor, rising 0.3 percent sequentially. Other components that sequentially gainer were housing and transportation costs.
Core inflation were up 2 percent year-on-year, its most rapid rate since January 2018. Nevertheless, similar to its headline counterpart, the acceleration was because of a low base. The monthly rise was just 0.08 percent.
“Overall, Malaysia’s inflation data continues to point to the absence of demand-pull pressures in the economy. A change in these settings is unlikely over the next few months”, said ANZ in a research report.
The data for inflation gives some leeway to Bank Negara Malaysia to cut its Overnight Policy Rate. Nevertheless, the last policy statement did not imply that a rate cut is imminent. In general, monetary policy has been quite stable in Malaysia characterised by a low amplitude for the OPR.
“We therefore, expect that the OPR to be maintained at 3.00 percent in 2019 and 2020”, added ANZ.© FxWire Pro 2020. All rights reserved. The FxWire Pro content received through this service is the intellectual property of FxWire Pro or its third party suppliers. Republication or redistribution of content provided by FxWire Pro is expressly prohibited without the prior written consent of FxWire Pro, except for personal and non-commercial use. Neither FxWire Pro nor its third party suppliers shall be liable for any errors, omissions or delays in content, or for any actions taken in reliance thereon.