Analysts at ANZ Research review the GDP data published by Malaysia which growth was the lowest in the last ten years. The USD/MYR pair is trading at 4.1365 after recovering from the low of mid-January.
Key quotes
“GDP growth eased to 3.6% y/y in Q4 2019 on the back of weak external demand. With the Malaysian economy facing myriad headwinds, including lower tourism income and demand for commodities, an improvement in growth is unlikely, at least until Q2 2020.”
“Bank Negara Malaysia (BNM) has emphasized that there is room for policy adjustment. A front-loading of government spending is also possible, in our view.”
“Weaker-than-expected Q4 numbers add further context to BNM’s surprise policy rate cut in January. The rate cut should serve to guard against downside risks to growth. At this stage, we cannot rule out another policy rate cut if economic conditions worsen.”
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