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Analysts at Australia and New Zealand Banking Group (ANZ) offers their quick reaction to the Malaysian inflation data released earlier this Wednesday.

Key Quotes:

“Malaysia’s inflation remained unchanged at 1.1% y/y in October. On balance, demand side inflationary pressures have been benign and our forecast for higher inflation next year primarily reflects policy changes.

Considering the evolving trajectory for growth and inflation, our base case is still for a 25bp cut in the policy rate next year.

It is, however, conceivable that Bank Negara Malaysia (BNM) may choose to preserve its policy space after the recent cut in the statutory reserve requirement (SRR).”