I don’t think anybody’s thinking will have changed with the stronger numbers coming out in the last couple of months. The almost unanimous consensus is that the Monetary Policy Committee will maintain the Official Policy Rate at 3.00% in their meeting today, and I can’t really disagree, even if I think core inflation is too high and credit expansion a little too frothy.
The main consideration will continue to be sustaining economic growth, and the deteriorating outlook for Europe and slowing growth in China and India may weigh down any hawks on the committee. The US and Malaysia’s other trading partners look better, but output expansion in these regions aren’t going to break any records soon.
Nor do I think there will be much chance for a rate cut either, as the outlook isn’t that bad yet and the selldown in the Ringgit over the past three months with little central bank intervention represents a de facto policy easing all on its own, even if BNM sticks to its interest rate target.
So I’m not looking for any surprises today.
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