Friday, September 19, 2014

Maybank FX Flash - MYR: No Boost from Rate Decision - 19 Sep 2014


MYR: No Boost from Rate Decision



§  BNM left the overnight policy rate unchanged at 3.25%, surprising market participants who called for a 25bps hike.
§  Reaction in the FX space was muted but USD/MYR remained lofty, underpinned by dollar strength. The latest statement from BNM suggests that there is a shift of precedence towards growth from concerns on financial stability.
§  Given the recent monetary policy developments, further upside risks in the UST rates and possibly greater-than-expected impact from the upcoming Budget 2015 on private consumption, we are compelled to tweak our MYR forecast to 3.28 against the USD for end-2014.

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