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Ringgit realignment (Part 3): Enhancing the attractiveness of Malaysia as an investment destination

In this multi-part series, we dissect drivers of currency phenomena, including: i) interest rate perceptions, ii) current account (CA) intricacies and the real economy, iii) capital flow dynamics in the financial account, and iv) money supply theories in relation to debt levels and the fiscal position. In this third part, we discuss the impact of …

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Monthly Review: Early signs of interest rate outlook divergence

Malaysia’s economy picked up by 3.9% in 1Q2024 (4Q2023: 3.0%) based on the advanced estimate, close to the official 2024 full-year gross domestic product (GDP) forecast of 4%-5%. The manufacturing sector registered a 1.9% rebound after two quarters of contraction, while growth in the construction sector accelerated to 9.8% (4Q2023: 3.5%). While the services sector …

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Ringgit realignment (Part 2): Prioritising the current account balance and foreign investments

In this multi-part series, we dissect drivers of currency phenomena, including: i) interest rate perceptions, ii) current account intricacies and the real economy, iii) capital flow dynamics in the financial account, and iv) money supply theories in relation to debt levels and the fiscal position. In this second part, we discuss the influence of the …

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Ringgit realignment (Part 1): Interest rates and currency perceptions

In this multi-part series of press announcements, we dissect drivers of currency phenomena, including: i) interest rate perceptions, ii) current account intricacies and the real economy, iii) capital flow dynamics in the financial account, and iv) money supply theories in relation to debt levels and the fiscal position. In this first part, we discuss the …

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Monthly Review: Rate cut pushback leading to bond sell-off

Malaysia posted a weaker-than-expected advanced gross domestic product (GDP) estimate of 3.4% in 4Q2023 (Consensus: 4.1%; 3Q2023: 3.3%), as growth in the services sector moderated to 4.7% (3Q2023: 5.0%). Consequently, the full-year advanced estimate GDP growth registered 3.8%, below the Budget 2024 estimate of 4.0%. Looking ahead, we project a higher GDP growth of 4.0%-4.5% …

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Effective management of expectations crucial to attract global portfolio investment flows, strengthen ringgit and improve market outcomes

Global investors closely monitor Malaysia’s national plans, which play a crucial role in attracting portfolio flows and influencing financial market outcomes, including the strength of the Malaysian ringgit. These plans provide essential information regarding Malaysia’s country risk and sovereign credit risk, shaping global investors’ perceptions of financial market valuations, particularly portfolio flows in the equity …

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