FacebookInstagramTwitterContact

 

Kebawah DYMM Raja Isteri Berkenan Berangkat Ke Majlis Berbedak           >>           Kerja Ada Kaitannya Dengan Hari Akhirat           >>           UPPA Terus Barigakan Khidmat Bantu Solat Pesakit           >>           Jepun Tinjau Peluang Kerjasama Bidang Pendidikan           >>           Mesyuarat Ad-Hoc Bincangkan Perkembangan ADI           >>           Two Men Arrested At Liverpool-Roma Match For Suspicion Of Attempted Murder           >>           Roma 'Made It Easy' For Liverpool To Build Lead - Eusebio Di Francesco           >>           Promoting I-Bantu Solat           >>           Meek Mill Released From Prison, Attends Sixers Game Vs. Heat           >>           Sources: WR Prospect Antonio Callaway Tested Positive For Marijuana At Combine           >>          

 

SHARE THIS ARTICLE




REACH US


GENERAL INQUIRY

admin@brudirect.com

 

ADVERTISING

marketing@brudirect.com

 

PRESS RELEASE

pr@brudirect.com

 

HOTLINE

+673 222-0178 [Office Hour]

+673 223-6740 [Fax]

 



Upcoming Events





Prayer Times


The prayer times for Brunei-Muara and Temburong districts. For Tutong add 1 minute and for Belait add 3 minutes.


Imsak

: 04:41AM

Subuh

: 04:51AM

Syuruk

: 06:10AM

Doha

: 06:33AM

Zohor

: 12:19PM

Asar

: 03:34PM

Maghrib

: 06:26PM

Isyak

: 07:37PM

 



The Business Directory


 

 



World Business


  Home > World Business


Malaysia Faces Higher Rates, Currency Risks and an Election Battle


Photographer: Brent Lewin/Bloomberg

 


 January 4th, 2018  |  09:22 AM  |   1023 views

MALAYSIA

 

Malaysia faces higher interest rates, currency risks and a contentious election battle in 2018 that will test Prime Minister Najib Razak’s grip on power.

 

Malaysia has benefited from a global trade recovery and a pickup in domestic spending, with economic growth probably reaching 5.8 percent last year, according to the median estimate in a Bloomberg survey of economists. Growth is seen moderating to 5.3 percent in 2018.

 

A booming economy and higher oil prices have boosted government coffers, allowing Najib to funnel funds to voters burdened by rising living costs. He’s managed this without compromising on his fiscal targets, pledging to narrow the budget deficit to 2.8 percent of GDP this year, from an estimated 3 percent in 2017.

 

 

The election, which must be held by August, is among the key issues investors are watching for this year, along with the following:

 

Interest Rates

 

Malaysia’s central bank may be the first in Southeast Asia to raise borrowing costs this year, with some economists seeing a move as early as in three weeks. Bank Negara Malaysia signaled in November it may be preparing to adjust policy given the strength of the economy, with Governor Muhammad Ibrahim clarifying later to say any adjustment would be a “normalization,” rather than a tightening.

 

Inflation eased to 3.4 percent in November after reaching a five-month high in September, but that hasn’t changed economists’ expectations of rate hikes.

 

“Our base case assumes Bank Negara Malaysia will raise the overnight policy rate in the first quarter of 2018, followed by an extended pause before hiking it again in 2019,” analysts at CIMB Group Holdings Bhd wrote in a note. The central bank may consider another hike in the second half of the year if inflation risks intensify, they said.

 

CIMB is projecting an inflation rate of 2.9 percent this year, while the government is forecasting 2.5 percent to 3.5 percent.

 

General Election

 

The timing of the general election may affect the outlook for interest rates, with some economists predicting the central bank will hold off until after the vote.

 

Najib -- who is yet to disclose the date for the vote -- is in a strong position, having weathered the financial scandal around 1Malaysia Development Bhd., and benefiting from a rebounding economy and a political opposition in disarray.

 

“Investors are likely to be a little bit cautious around the election,” said Rahul Bajoria, a senior economist at Barclays Plc in Singapore. “Once we are through the election then we’ll have a bit more clarity as to what kind of economic reforms, particularly on the fiscal side, can be undertaken in the course of the next two to three years.”

 

Currency Strength

 

 

The ringgit ended 2017 as Asia’s second-best performer with a 10.9 percent appreciation against the U.S. dollar, its first gain in five years. The Malaysian currency is projected to climb to 3.96 per dollar by the fourth quarter, according to the median estimate in a Bloomberg survey of economists. It traded as high as 4.0160 against the dollar on Wednesday in Kuala Lumpur.

 

With the currency still cheap and the central bank likely to raise interest rates, the ringgit may strengthen past 4 per dollar this year, said Sook Mei Leong, Southeast Asian head of global markets research at Bank of Tokyo-Mitsubishi UFJ.

 

Investors previously underweight in the ringgit are rebuilding positions in the new year, with sentiment underpinned by Malaysia’s improving economic growth, prospects for a smaller fiscal deficit, as well as an improved current-account surplus and foreign reserves, according to Ray Choy, head treasury strategist at CIMB Bank in Kuala Lumpur.

 


 

Source:
courtesy of BLOOMBERG

by Pooi Koon Chong

 

If you have any stories or news that you would like to share with the global online community, please feel free to share it with us by contacting us directly at pr@brudirect.com

 

Related News


Man Slashed To Death, Boy Seriously Injured In Lahad Datu

 2018-04-25 09:58:00

#Metoo Japan: What Happened When Women Broke Their Silence

 2018-04-25 09:20:49

The $7 Trillion Debt Pile Looming Large Over Chinese Households

 2018-04-25 09:54:35