Halister News

(Bloomberg) -- Stabilizing global equity markets and with rising Malaysian CPI will likely induce Bank Negara Malaysia to hold its benchmark interest rate today, Bloomberg strategist David Finnerty writes.

• Overnight policy rate to remain at 3.25%, according to all 20 economists in Bloomberg survey; decision due at 6pm local time
• At its last meeting Jan. 21, the central bank said “there are heightened risks in the global economic and financial environment"; since that meeting, global equity markets have rebounded, indicating easier policy may not be needed now
• Jan. CPI rose 3.5% y/y, and BNM Gov. Zeti said Jan. 28 it may exceed 4% in 1Q, suggesting little pressure for an immediate rate cut
• Malaysian export weakness continued in Jan. with exports declining 2.8% y/y; Bank Negara Malaysia however said that month that growth remains driven by domestic demand, indicating soft exports alone may be insufficient to warrant easing
• NOTE: David Finnerty is an FX strategist who writes for Bloomberg. The observations he makes are his own and are not intended as investment advice.