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Bank Negara (BNM) cut its overnight policy rate and economists at TD Securities expect another cut in the next meeting. USD/MYR is sitting at 4.3065.

Key quotes

“BNM cut by 50bp to 2% in line with ours and market expectations (5 out of 23 looked for 25bps and one for no change).” 

“Malaysia’s growth outlook has deteriorated sharply with GDP likely to be well below potential this year amid a very subdued inflationary backdrop. BNM states that average inflation is expected to be negative this year.”

“We think BNM will likely need to cut again, likely at its next meeting.”