Straight From The Horse’s Mouth

Mind that I’m not calling our central bank governor a horse, but Tan Sri Zeti was on BFM radio this morning, talking about household debt, this year’s economic outlook, and internationalisation of the Ringgit, among various topics:

As with any central bank communication, there was a lot of talk, but very little was actually said. Still there are clues as to what central bank policy is likely to be this year.

A lot will depend on the incoming data over the next few months, but the way I’m reading it is that there’s little chance of a rate cut at the next meeting unless the data is really bad. The focus will be domestic rather than external, so a couple of bad months of bad trade data won’t weigh on MPC deliberations too much unless there’s evidence that it’s being passed through into domestic demand. And I don’t see domestic demand really having been affected much by falling export growth these last few months.